In a new opinion piece published on ifa, Roar Software chief executive Kevin Liao said there is a false assumption within the industry that by shortening SoAs, other issues – including reducing the cost and increasing client understanding – will be addressed.
“However, efforts to reduce the cost of producing SoAs and increase client understanding must go beyond simply length,” Mr Liao wrote.
While SoAs are primarily compliance documents, they also present an opportunity for advisers to showcase their advice. SoAs should be more than text and tables. They should be a visual, dynamic aide for articulating a business’ value proposition, philosophy and expertise.
“Advisers are ideally positioned to drive SoA improvements because they are closest to the client and stand to benefit the most from satisfied, engaged clients,” Mr Liao said.
Mr Liao said that technologists can support advisers in this change by automating “repetitive tasks”, present advisers’ information in a more engaging style and meet their obligations in a clear and concise way.
He argued that as the industry continues to push for legislative reforms to make advice more affordable, it should also aim to improve the delivery.
“As the Baby Boomers get older, their ability to read and digest large advice documents will inevitably decline,” Mr Liao wrote.
“At the other end of the spectrum, younger clients don’t have the appetite for wordy documents. They expect a rich, digital experience similar to the one they get from other service providers in banking, entertainment and retail.
“Getting the advice experience right is critical because affordability is irrelevant if clients don’t fully understand and value the advice they receive.”
Read the full opinion piece here.
With all the obligations and duties we have to follow, how can you deliver a short SOA???
I’ve got over 20 years in our industry. Couldn’t tell you the last time an SOA played any role in the advice process other than to sit on file for the auditor. Clients pay for my IP, and buy into a relationship with a human they trust. No-one cares about the SOA.
Oh, you mean the same as with any other Profession such as an Accountant, Lawyer or Engineer? You know, the professions whose opinions, knowledge and experience people value and are willing to pay for, along with their guidance and assistance? The professions who don’t keep lengthy file notes, SoAs, FNAs, Risk Profiles, PDSes, Opt-Ins, FDSes, etc? This is the one industry that’s not only been pillaged by the media and government agencies, but has bent over time and time again to pretty much accept anything given to it. It’s ridiculous and has gone on far too long, especially when we get clients complaining (yes, COMPLAINING) about the paperwork and hassle they have to go through to get advice and/or assistance/implementation instead of just picking up the phone or sending an email with a question, receiving an answer, and providing a YES or NO. The government need to wake up and stop pandering to an overpaid, inefficient, unethical, illogical, self-important regulator in ASIC.
The SOA is not the problem. The insane levels of red-tape and fees behind the scenes are the problem. Also ASIC”S view that you can only be of service to a client if you are providing SOA’s.
Fact of the matter is that with annual opt-ins, ASIC should just get out of the way. If a client is happy to renew an agreement every year, then it is nothing to do with ASIC what services are being provided. The client is an adult and doesn’t need the Liberal Party Nanny State to check up on them.
kill SOAs and parasite Licensees … then we can start to rebuild
You are right about parasite licensees. 100%.
THIS ^^^^
So self-license and take back greater control of both.
The first thing I say when I hand a client an 80 page SoA is sorry – I dont make the rules – I just follow them.
The regulations stipulate an SOA must be understood by the consumer, in other words short sharp and to the point. Its about time ASIC started giving some direction on SOA content to Advisers to counteract the industry being high jacked by Lawyers spooking for their own self interests. [c[size=12px][/size]olor=black][/color]
You mean the same ASIC which came up with the most extreme, draconian interpretation of the FDS and Opt-In legislation so a process which should take no more than 90 seconds takes more than 30 minutes per client? The same ASIC which lobbied for Standard 3 of the Code of Ethics to be impossible to comply with? The same ASIC which conducted research on a targeted group of high volume suspected churners, but then sold the results to the public as a representative sample to force changes which make life insurance unprofitable? 90% of our problems are attributable to ASIC’s intervention, lobbying or inaction in one way or another. ASIC is the problem, not the solution.
Be nice if ASIC could do it Peter but the couple of times they have tried they have failed miserably.
They fail because the BS complex laws and ASIC’s even more stupidly complex and draconian interpretations & REGs means it’s impossible to make it simple.
The whole lot needs to be scrapped and start again.
Get rid of the past 25 years of ever increasing BS complex additions, on additions, on additions of rubbish.
Sorry Peter- but “the industry being high jacked by Lawyers” essentially is ASIC….
Kill the SOA. No one reads it. It does not ‘protect’ the adviser. It does not add value for the client.
Let advice firms deliver and explain the advice however they like. Powerpoint presso, recorded videos, short documents & emails etc.
The FSCG, FDS, AAA already contain important disclosures, much of this is simply repeated and buried in the SOA. Instead of an SOA, there will be one mandatory, SHORT document, which provides key disclosures relating to the recommended products (replacement product tables, product costs, commissions)
Accountants advice can be 3 page letter, so I totally agree Billy to make it more meaningful for clients this way. Does ASIC or Government have the gumption … clearly they don’t care, nor do consumer groups, but the lawyers love it …
Its not the Govt – it is the AFA and FPA who’ve stuffed this up because they were in the pay of the big insurers and banks…
Ah no. Bad regulation is 100% the fault of the government of the day. Either for introducing bad legislation, not fixing bad legislation, or not exercising sufficient control over bad regulators like FASEA and ASIC.
The issue of product companies influencing advisers and their associations could quite easily be solved by banning vertical integration, and licensing advisers directly rather than via AFSLs. It cannot be easily changed from within by advisers with good intentions who have far less power than the product companies that control their licensing. Product company influence over advice is a direct outcome of bad legislation that needs to be fixed by the government.
What about medicos- they just give you a script – and make a few internal notes…
Careful, that could make advice affordable!
For the client, the SOA’s primary value is to empower them to make properly informed decisions with their adviser. Currently, SOA’s seem to include many elements which do not assist this process, and omit other key elements (such as longevity planning) which are essential for truly holistic advice.
Haven’t we learned anything ? The Storm Financial disaster proved that wonderful compliant documents mean nothing when the ethics and integrity of the person preparing them are in the toilet in the first place. No matter how much you try, you cannot teach ethics or integrity . . . and believing that a pre-designed computer game is the answer is just delusional.
“Fintechs” have been one of the few beneficiaries of our overblown regulatory mess. They regularly claim that the solution is not regulatory reform, it’s buying more of their products. Jane Hume, who is totally inebriated on the fintech Kool Aid, willingly swallows this garbage and uses it as an excuse to abrogate her responsibilities to Australian consumers. Any fintech that suggests regulatory reform or simplification is not necessary is doing so out of narrow self interest and should be shunned.
at the other end of the spectrum younger clients.. actually expect a SOA on a mobile phone delivered via a 15 second Tik Tok video with the Planner dancing and pointing at web page links. Even that is too long for their Gold fish attention span.
Quote of the year! (and we are only 3 weeks in)
🙂