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Record of Advice (RoA)
What is a Record of Advice (RoA)
A Record of Advice (RoA) is a concise document summarizing financial advice provided to an existing client. It differs from a full Statement of Advice (SoA) by focusing on updates or follow-up recommendations, rather than comprehensive new advice
When Is an ROA Used
It is typically used in the following scenarios:
Follow-up Advice
Let’s say your adviser gave you a detailed plan (an SoA) a few months ago. Now, they’re providing advice that builds on that plan. Instead of giving you a new SoA, they might use an RoA to document this follow-up advice. Let’s say, if there are more suitable investments available for your portfolio which is appropriate and in-line with your investment goals, an RoA can be used to incorporate these changes without repeating the entire financial plan.
Change in circumstances
An RoA is also used when a client's financial or personal circumstances change. These changes can significantly impact their financial goals and strategies. In such cases, an adviser can provide updated recommendations through an RoA. For instance, if a client's income increases, allowing for additional retirement savings, an adviser can use an RoA to recommend increasing investment contributions.
Ongoing Advice
As part of ongoing client service, advisers should provide a Record of Advice annually or semi-annually. This document serves to confirm the client's financial plan remains aligned with their goals and objectives, and to validate the ongoing suitability of the recommended strategy.
Why Use an RoA Instead of an SoA?
A Record of Advice (RoA) offers distinct advantages over a comprehensive Statement of Advice (SoA):
Efficiency
RoA are typically more concise and can be prepared more expeditiously than SoA, saving time and resources for both the advisor and client.
Focus
By concentrating on specific updates or changes to an existing financial plan, RoA provide clients with relevant information without unnecessary detail.
Cost-effectiveness
Given their streamlined nature, RoA often involve lower preparation costs compared to the creation of a full SoA.
RoA vs. SoA: What’s the Difference?
To sum it up, an SoA and an RoA serve different purposes in the financial advice process:
Scope
An SoA is a comprehensive document covering your entire financial situation, while an RoA focuses on updates or specific advice.
Use Case
SoAs are used for initial or complex advice; RoAs are for follow-up or ongoing advice.
Detail
SoAs are detailed and extensive, while RoAs are concise and targeted.
PlanWise: Premium Paraplanning solutions
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Contact us today at info@planwiseservices.com to discuss your specific needs and discover how PlanWise can help you achieve your business goals.
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