So, why do we spend so much time producing statements of advice (SOAs) that our clients don’t want to read!?
The simple answer could be that they’re full of content that’s of no interest to the client. But that’s absolutely not true. The SOA is the primary document that formally addresses a client’s most important dreams, goals and concerns, complete with well-thought-through analysis, recommendations and an action plan of how to achieve those goals, including how to minimise risk for themselves and their family. The SOA is of critical importance!
Given the relevance and importance of the information in them, why the heck don’t they get read? I think most advisers would acknowledge that it’s because they’re usually far too long (sometimes approaching 100 pages!), flooded with layers of templated compliance wording from the licensees’ legal teams, they’re hard to read, even harder to understand and are usually so bland and vanilla that many people would rather poke out their own eye than wade through an SOA in their spare time. Who suffers the most is the client, who often does not understand the underlying rationale for the advice being provided.
So, why on earth do we continue to spend hours and hours on these documents? It’s time that changed.
In a world of connected technology, integrated data feeds and interactive design, the creation of an SOA can now largely be automated. The experience of interacting with one can be dynamic, visual and engaging. It just takes a little out-of-the-box thinking.
The industry has touted digital SOAs for some time, with ideas ranging from “smart PDFs” right through to getting a client to wear a VR headset for a 3D experience.
The Financial Planning Association recently established a working group consisting of financial planners, ASIC, CoreData, financial services lawyers like Holley Nethercote, and a handful of fintech companies to understand what the future of advice looks like. The core focus of this group is moving to digital SOA.
Streamlining the creation of SOA documentation will save the industry thousands of hours in lost productivity each year – we just need to figure out what the best solution is. My bet – it will take using existing technology in a new way.
Mark La Bozzetta, head of industry strategy, SalesPreso
Why am I reading this? Check the relevant ASIC regulatory guides…that’s why. Write to ASIC & convince them.
SoA = save own arse, it is name that means nothing, it should be confirmation of discussion CoD. The FPA in its wisdom with the AFA decided that this was the best way to save the AFSL. The agents and brokers act 1997 was explicit in the wording [work for the client] We have worked to save the AFSL and their volume & other bonuses. We need to simplify this complex SoA matter. I know this will upset many.
100% arse covering but also 100% so you can be easily sued as its impossible to 100% comply with all the BS laws and regulations around now.
How about ASIC go back to drafting some usable templates that are CLEAR, CONCISE and EFFECTIVE.
Have AFCA agree to their use so adviser don’t get sued for using ASIC templates.
And try to reduce to regulatory BS that is an SoA and Financial Advice generally.
ASIC’s last template was 23 pages and that just dealt with limited Life insurance advice.
[b]ASIC wouldn’t have a clue of being Clear, Concise and Effective even if it ran them over & over & over !!!!!!!!! Useless. [/b][b][/b]
Mate are you living in a sheltered workshop. Did you view the last ASIC attempt at a risk SOA two years ago. You remember the one – it disclosed commission in 22 point font bold on the front page, and the went rapidly downhill.
ASIC and the compliance lawyers who feed off complance and scare the crap out of licencees AND their PI insurers ARE FULLY RESPONSIBLE
I have to admit, that opening line made me laugh; it’s a good line. I get it, yes something we have been battling for years as advisers. We are working hard to make a change and find a better balance between an understandable format that clients understand, advisers are proud to deliver and that also meets compliance/PI standards. If you are at the FPA Congress in Melbourne this week come and see us (stand E15) or visit https://livepreso.com/wealth
Who in their right mind or with any ethics would go to a ‘conflicted’ FPA conference these days. Good luck.
Because we have to