SOAs – valuable or ‘a complete waste of time’ for clients?

BREAKING NEWS – New Financial Advisers are instructed on how to create a Statement of Advice (SoA) but rarely are they shown how to present a SoA in a “clear, concise and effective” manner.

New advisers are often left to work out their own style and method of presentation. Because of the existing cumbersome nature of the SOA within many licensees, it often becomes an unwieldly process with advisers trudging through the information, fearful they might miss an important compliance disclosure that could see them end up in AFCA (or so they think).

Astute advisers know the future of the SoA will be less about highlighting compliance and regulatory requirements and more about the method, style and technology used to communicate the information in an easy-to-understand manner.

This will increasingly be the case as technology permits the quality and appropriateness of the advice (relative to prevailing regulations and legislation) to be assessed as the SoA is created, rather than waiting until after the fact.

Many people are visual learners and yet the SoA is often text heavy. Some template layouts are confusing and bewildering, which cynics might say is a deliberate ploy to bamboozle clients in to signing up.

I posit that SoAs are not a complete waste of time – they are a necessary part of the personal advice process. In the short term whilst the “Quality of Advice” review and ALRC are considering the state of play, advisers and licensees must be brave and innovative in how they deliver the intent and content of the SoA to clients. By doing so in a “clear, concise and effective” manner, advisers will establish they have the client’s “informed consent” to act.

On the whole, most clients want to be guided by a trusted professional. The SoA is an important and necessary part of this process – it doesn’t mean you have to bore your clients to death with it. It means you need to make the process engaging so the information is heard, understood, and retained by the client.

You can read another opinion in an IFA article here.

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