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Shorten SOAs, lawyer warns licensees

Statement of advice (SOA) templates should be shortened to avoid unnecessary information that could land advisers in hot water, says The Fold’s Claire Wivell Plater.

A change in legislation is not required in order for advisers to ensure they have compliant SOAs in place, Ms Wivell Plater said in a communication issued yesterday.

“One of the first steps licensees can take is to shorten SOA templates,” she said.

“Most are far too long and contain far too much unnecessary information. This actually interferes with advisers’ ability to communicate their recommendations and to explain how the recommendations will help clients achieve their goals.

“In relation to SOAs, we really need to be adopting the philosophy that less is more.”

However, the financial services lawyer and compliance consultant – who will be speaking at the upcoming ifa Business Strategy Day – says there are a number of “minor exceptions” that advisers and licensees should be aware of.

“If an adviser has an ongoing fee arrangement with the client, they should not be required to include information about their fees in every SOA, or even to incorporate it by reference,” Ms Wivell Plater explained.

“The client receives this information in their annual fee disclosure statements. Similarly, there should be no need to repeat information about associations and relationships that have already been disclosed.”