Rethink the SOA, urges compliance expert
Advisers need to shift their thinking around the structure and purpose of their SOAs to improve client engagement and compliance outcomes, according to compliance consultancy Assured Support.
Speaking at the ifa Business Strategy Day in Sydney on Thursday, Assured Support principal Sean Graham said current SOAs were unnecessarily long and that this could hinder clients’ ability to understand the advice they receive.
Mr Graham said the law only stipulates that eight elements be included in the document, and a lot of information included in modern SOAs can be cut without compromising the documents’ compliance.
“I think that RG90, for all its limitations, is actually telling us we can cut stuff out of our SOA,” he said.
Further, Mr Graham cautioned that an SOA that is too long or too dense may actually fail to meet the legal requirements imposed on such documents.
“Your advice has to be clear, concise and effective, and how can 60, 90 or 120 pages be clear, concise and effective?” he said.
“Your ability to hide behind the SOA, the disclosures and disclaimers and the limitations in the SOA are very limited. At the end of the day, when the issue is addressed, it’s going to come down to ‘did the client understand what they were getting’, and if the document is 120 pages, is it reasonable to expect the client would understand the advice’s implications, consequences and what it meant?”
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