Documentation, financial advice

QAR does not remove need for advice documents

QAR advice documents

Financial advisers should be looking at what clients want from written advice if a Quality of Advice Review recommendation to stop the use of statements of advice is implemented.

Financial advisers keen to support the Quality of Advice Review (QAR) recommendation to end the provision of statements of advice should still be looking to generate some form of advice documents given the current cost of advice, according to a senior technical executive.

BT Financial Group head of financial advocacy and literacy Bryan Ashenden said if the QAR recommendation was adopted, a key consideration in the provision of advice documents would be to consider what a client would like to receive at the end of the advice process.

“The way to turn this around is to ask if you were the client, wouldn’t you expect to be receiving something if you are going to see a financial adviser and paying X dollars for that advice?” Ashenden said during an online briefing today.

“Would you not have an expectation that you should walk out with something that tells you what is going to be done on your behalf if you accept this advice?

“In most cases people will say yes and expect to receive something and not walk out with nothing in their hands at all.”

He said the expectation to receive some form of written statement would not go away and was addressed by recommendation nine in the QAR Final Report.

“As part of this recommendation, where it talks about getting rid of statements of advice and records of advice and not having a requirement to provide them, is the requirement to ask clients do they want to get something in writing, and if they say yes, then you need to provide that,” he said.

“That raises the question about what it should look like and what should it contain, which, at the least, should be an easy to understand summary about what it is that you are recommending to the client.”

He said this recommendation was likely to be strongly supported by the advice sector, but may take some time to implement as it relied on wider changes to the types of advice and their provision to clients.

“There is a question about how quickly this type of reform could take place, but it does open up the opportunity for more innovation in the way that advice gets presented and what the documentation around it could look like,” he said.

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