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New disclosure regulations 'a big leap for some businesses'

Mark Banicevich and David Greenslade speaking at an FSC webinar said that some businesses will need to make big changes to meet new disclosure requirements come March 15.

Monday, November 2nd 2020, 6:00AM 3 Comments

by Daniel Smith

David Greenslade

At an FSC “Get In Shape” conference dedicated to bringing the industry up to speed on the new disclosure regulations, David Greenslade of Strategi Group said that the new disclosure regulations will be “a big leap forward for some businesses”.

Greenslade added that some RFA advisers would not be used to talking about their own remuneration, but that the regulations were clear that it will be “on you to disclose the value that you add to a portfolio. This includes disclosing how much you are getting paid.”

Mark Banicevich from Partners Life, responding to a question from the audience clarified: “You don’t have to disclose your salary to clients, but you do have to disclose your commission. Also you must disclose your individual reliability history, whether you had any bankruptcy or warnings from the regulator.”

There are four stages of disclosure as part of the new regulations.

1. At all times on the company website, for which the FAP is responsible.

2. When the scope of financial advice is known, for which the adviser is responsible.

3. When financial advice is given, for which the adviser is responsible.

4. When there is a complaint, for which FAP and adviser are responsible.

It may seem that the multiple stages and murky separation of responsibility could have some advisers scratching their heads. But Banicevich said that while the industry was “saying what you had to disclose, it isn’t saying how you have to disclose it”.

Greenslade adds that there is “huge flexibility with how you facilitate disclosure. Whatever way you can think of communicating it you can do it.

“Disclosures shouldn’t be something hidden away at the bottom of the website. Wherever a client is likely to land on the website the disclosure should be there.

“It doesn’t have to be the current boring content. Advisers should be working to make these new disclosures engaging so that clients can read it and understand it at the point that they encounter it.”

Tags: Disclosure FSC

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Comments from our readers

On 3 November 2020 at 4:37 pm All hat no cattle said:
Honestly surprised to hear that my current disclosure may be boring. I'm sure the local library has a copy on the feature shelf next to The Covid Chronicles.
Can't have that.
Maybe I will go to an online disclosure. It will be a brief video featuring animations, picture slides and Sail Cats. It will be followed by a pop quiz (CPD - Client-Provider Development), which requires 95% correct answers in order to gain access to my book-a-meeting page.
On 4 November 2020 at 9:49 am w k said:
@ahnc: i like your past para. yes, we certainly need to separate prospects from suspects. suspects are "short term gain, long term pain".

note the 4 stages of disclosures placed heaps of responsibilities on FAP and advisers. when will the FMA, being the expert in the sales process, conduct a session for advisers on how to identify prospects and suspects. this will certainly be of enormous help to advisers in reducing the risks of unnecessary complaints.
On 4 November 2020 at 3:08 pm gavin austin adviser business compliance said:
Hi Guys
Seems easy from my perspective. One if you have a website then put the required information clearly and prominately on it. Two if you meet withsomeone and don't agree on a scope of service no disclosure required they are a suspect. If they become a prospect ie you have agreed a scope of service then disclose what you need to. If they don't become a client stop disclosing. I hope you get the drift guys but if not you can contact me as I'll happily explain(no charge).

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