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finance wise. A simple, clear and cost effective solution to the expiry of the accounting exemption. Are you ready to offer SMSF advice to your clients on 1 July 2016?

FOS’ top 10 tips for accountants giving financial advice (Part 2 of 3)

James Barger-bos Leave a comment

This is the second article outlining the Top 10 tips for accountants giving advice after the accounting exemption expires June 30, 2016.

4. Explain the risks to clients who choose to act against your advice

You must be very clear in explaining the risks and documenting that the course of action is against your advice. Explain the risks in language the client understands make a contemporaneous file note and have the client sign it.

Fwgs solution – an example of this for accountants is recommending an SMSF and closing down an existing fund that has insurance(s). All clients are given the option of a free twenty minute consultation with an appropriately authorised financial adviser.

5. Explain what types of service you are providing

Clients don’t know the difference between information, general advice, personal advice and execution-only services.

If you don’t give the appropriate explanations and warnings or you are unclear, then you could be found liable for advice or activities that you had not intended to provide.

Fwgs solution – Accountants will only be authorised to set up or wind up and discuss income streams.

6. Use template forms and documents carefully

Make sure template forms and documents about strategies, products and risks are appropriate to the client you are advising.

It is very difficult to convince us that you have selected the right strategies and financial products for a client if the documents contain errors, are missing information or contain copious amounts of irrelevant material.

You will also have some trouble convincing us that the client understood your documents if they contain pro-forma jargon or complex concepts.

Tailor documents to your client’s financial literacy. Statements of Advice must be clear, concise and effective.

Fwgs solution – Every client has a unique online identifier based on the name of their SMSF. The temptation to template is directly related to the amount of time it takes to produce a SoA. Our web based software captures the information you have already gathered in the Needs Analysis and pre-populates the SoA leaving you to outline the client’s objectives, make your recommendation, conduct a comparison with the existing super funds and add in the costs. Our system is simple, clear and cost effective.

Finance Wise Global Securities Pty Ltd has a unique solution for accountants requiring an authority to advise on SMSF’s once the accounting exemption expires please email the team at [email protected] to find out more.

Alison Maynard, ombudsman, investments and advice, Financial Ombudsman Service Australia

Source: SMSF Adviser Sept 9, 2016.

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FOS’ top 10 tips for accountants giving financial advice (Part 1 of 3)

James Barger-bos Leave a comment

FOS (Financial Ombudsmen Service) is the leading External Dispute Resolution organisation for financial advisers and, after 30 June 2016, accountants authorised to provide advice after the accounting exemption expires. They have provided commentary on providing personal financial advice to retail clients to ensure they avoid disputes arising.

This is the first of 3 articles outlining their Top 10 tips

1. Take detailed file notes

FOS relies on evidence provided by the parties to a dispute. Documents created at the same time as the activity or advice in question are usually given more weight than later recollections of what was said or done.

This means contemporaneous file notes of conversations and actions are solid gold when a dispute comes to us.

Whenever possible, confirm verbal instructions from a client in writing (e.g. send them an email after a telephone conversation confirming what was said). Statement of Advice and file notes should detail how any conflicts between goals, available resources and willingness to take risk are resolved.

Fwgs solution – our software builds in the headings and automatically includes the key dates. If your licensing solution does not include software then the likelihood of breaching is very high.

2. Clear goals and strategy

We do not consider client objectives and instructions written in industry terms that few clients would understand to be a reliable record.

Write down a client’s objectives in the words the client has used in answering your questions about their objectives and how to quantify those objectives. This demonstrates that you have heard and understood the client’s goals in seeking advice – e.g. ‘to retire at age 65 with an income of $50,000 per year’. Detail how the strategy you are recommending will achieve the client’s goals.

3. Turn clients away when appropriate

If your services are not suited to a particular client (e.g. they are seeking advice about direct shares and you don’t provide that service), you must tell them so and send them away. Don’t try to shape the client to your offering.

If a client is seeking a return which does not match their risk profile and you can’t convince them to change their expectations, either send them away or see tip 4.

Fwgs solution – refer your client to our fully authorised team and you will receive a rebate of your licensing fees with appropriate disclosures included in the Statement of Advice.

Finance Wise Global Securities Pty Ltd has a unique solution for accountants requiring an authority to advise on SMSF’s once the accounting exemption expires please email the team at [email protected] to find out more. We also conduct face-to-face RG146 training! Register your interest today.

Alison Maynard, ombudsman, investments and advice, Financial Ombudsman Service Australia

Source: SMSF Adviser Sept 9, 2015.

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  • SEND it to a friend from the sidebar
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Why accountants should join the finance wise license. Youtube 3 of 3

James Barger-bos Leave a comment

Take a look at our new Youtube clips discussing the accountants’ exemption.  Finance wise offers a clear, simple and cost effective solution to accountants wishing to continue offering SMSF advice to clients after 1 July 2016.

Register your interest to learn more about the finance wise accounting exemption solution.

We also offer face-to-face RG146 training.  All assessments are completed during the course.

If you found this article interesting, why not
  • SEND it to a friend from the sidebar
  • LEAVE A COMMENT by clicking on the icon at the top of the article
  • Send FEEDBACK directly to us at [email protected]