Statement of Advice (SoA)

What is a Statement of Advice (SoA)

A Statement of Advice or SOA is a formal document that outlines the recommendations a financial adviser is making for a particular client to help them to achieve their financial needs and objectives. Providing clients with an SOA is a legal requirement for all registered financial advisers with an Australian Financial Services License (AFSL). The primary purpose of a Statement of Advice is to provide tailored recommendations and guidance to individuals seeking assistance in managing their finances. It serves as a roadmap that aligns an individual’s financial goals with suitable strategies, investments, and insurance options.

Who requires Statement of Advice?

Anyone seeking professional guidance and recommendations for their financial decisions should consider obtaining a Statement of Advice. In Australia, financial advisors are legally required to provide an SOA to clients when giving personal financial advice.

What is the purpose of Statement of Advice (SOA)?

The purpose of a Statement of Advice (SOA) is to provide a clear and comprehensive overview of the financial advice given to a client by a licensed financial planner or adviser.

Here are the key objectives of an SOA:

Transparency

It ensures that clients understand the advice they are receiving and the reasons behind it.

Informed Decision-Making

By providing detailed information, SOAs help clients make informed decisions about their financial future.

Protection of Clients/Adviser

SOAs help protect both the client and the advisor from potential conflicts of interest and ensure that financial advisers are acting in client’s best interests.

Regulatory Compliance

SOAs are a legal requirement for financial advisers in Australia and help ensure that they comply with industry standards and regulations.

What all information a SOA typically includes?

An SOA must comply with the requirements of Regulations and must include:

Client's financial situation and goals

This includes their current financial position, risk tolerance, and desired outcomes.

The potential risks and benefits:

The document outlines the potential advantages and disadvantages of the recommended course of action.

Recommended financial products or strategies

This could be investments, insurance, superannuation, or other financial instruments.

Costs and fees

The SOA discloses any charges associated with the advice or the recommended products.

Reasons for these recommendations

The SOA explains why the adviser believes these choices are suitable for the client's circumstances.

Essentially, the SOA acts as a contract between the client and the financial adviser, ensuring that both parties understand the advice provided, the potential consequences, and the financial implications. It also helps protect the client's interests and ensures compliance with Australian financial services laws.

Benefits for Financial Advisers Providing SOAs in Australia

Legal Compliance

SOAs are a mandatory requirement for Australian financial advisers, ensuring compliance with regulatory standards and avoiding potential legal issues.

Enhanced Client Relationships

SOAs provide a clear and transparent overview of the advice given, fostering trust and understanding between the adviser and client.

Risk Mitigation:

SOAs serve as a record of the advice provided, protecting the adviser from potential disputes or claims of negligence.

Professionalism

Providing SOAs demonstrates a commitment to professionalism and best practices in the financial advice industry.

Improved Decision-Making

SOAs help clients make informed decisions about their financial future by outlining the potential benefits, risks, and costs of recommended strategies.

Documentation of Advice

SOAs provide a comprehensive record of the advice given, allowing for easy reference and tracking of progress towards financial goals.

Business Development

Well-crafted SOAs can be used as marketing materials to attract new clients and showcase the adviser's expertise.

How PlanWise can Help Advisers Provide a Statement of Advice?

PlanWise assist financial advisors in preparing Statements of Advice (SoAs) with quick turnaround time. By utilizing the expertise of our Paraplanning outsourcing services, financial advisors can save time, improve efficiency, and deliver high-quality SoAs that meet the needs of their clients while ensuring compliance with regulatory requirements.

Our paraplanning team has software expertise on XPLAN, Midwinter, AdviserLogic, Platform Plus, IRESS and all other associated industry software.

To learn more about how we can benefit you, contact us at hello@planwiseservices.com