SOAs and the value of effective client communication
Source Of News
By Joel Ronchi, COO, 21st March 2022
There still appears to be a significant amount of inefficiencies in the preparation of SOAs.
Even when outsourced paraplanners are used, advisers will often have to spend an hour or two creating the “Paraplanner Strategy” paperwork, and then spend another hour or two vetting the SOA generated. Some advisers are still having to then fix mistakes and misunderstandings in communication.
The reality is that SOAs will be around for a while yet, although there is no doubt some improvements will likely come from the Quality of Advice Review, (QAR).
The industry is seeing a new breed of technology providers (such as Asendium) which aim to solve the SOA generation efficiency problem.
Fourth Line is collaborating with these industry innovators to assurance check the quality of the advice as its being created. Why? There are several benefits to this approach:
* reduces the need for expensive and time consuming post-advice audit programs. The advice is checked against legislation, regulations, ASIC insights, AFCA determinations, and the Corps Act and the advice assurance report generated forms part of the client file audit program.
* mitigates risks associated with breach reporting obligations licensee must adhere to since October 2021. In particular, the Fourth Line process helps to minimise implications from “deemed significant breaches” by ensuring any potential breaches of civil penalty provisions are identified and resolved before the SOA is presented to the client.
Whether they be called SOAs, LOAs, ROAs, MOAs, and any other ‘A’, the true value lies in the ability of advisers to communicate the value of the advice through interactive presentation and engagement.
In the not too distant future, across the broader advice market, personal advice will be delivered in a tech-based, interactive way that deeply engages the client so they can truly understand the value of the advice.
Advice will be recorded and clients will be able to listen and watch it repeatedly, at their leisure, rather than trying to lumber through a 50, 60, 70 or more page document.
Advice practices will be able to verify and track their clients’ engagement with the personal advice, enabling advisers to identify areas clients may need assistance with, whilst providing compliance records for audit or complaint resolution purposes.
Fourth Line is a rigorous RegTech risk management and compliance system for advice practices, dealer groups and other wealth management participants. Fourth Line uses algorithmic approaches to simplify the complexity in advice reviews whilst maintaining human oversight, empowering compliance teams to coach and develop strong advice behaviors through data driven insights from advanced analytics for adviser, practice/dealer group and industry benchmark comparison with centralised document storage and access to meet regulatory needs.
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