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Author: Admin | 2025-04-27
The Statement of Advice is a perennial source of complaints from advisers, but they're not alone: few consumers read, understand or value the document that's presented to them. This is a sad reality of advising retail clients, but it becomes distressing when you realise that most "advice professionals", look to Regulators, Licensees, Associations and other parties to give them better advice documents. Despite the rhetoric of accountability and professionalism, few advisers demonstrate the courage and clarity to properly focus on the client experience or the critical need for informed consent. Advisers offer many excuses to explain why their SoA is dull, dense and demotivating. Blame-storming is easy, but if that's your situation it may be time to accept that You are the reason you don't provide better, clearer and more engaging advice. The Regulator and their recommendations “ If they were serious, ASIC .. would liaise with advisers and licensees and create a standard SOA which all advisers have to use, which meets the legal obligations and is simple enough for clients to understand and actually want to read. While they continue to refuse to do this, clients are left worse off.” — ANONYMOUS, IFA.COM.AU, 23 MARCH 2018 To understand the context of ASIC’s ‘workshopped’ Risk SOA, it’s necessary to understand both RG90 “Example Statement of Advice: Scaled advice for a new client” and Report 557 “Response to submissions on CP 284 Example Statement of Advice for life insurance: Update to RG 90”. Well, if not to understand them, to at least to appreciate that ASIC has made, and continues to make, efforts to assist us to understand what ‘clear, concise and effective’ advice documents might look like. The product may be sub-optimal in some respects but it shows the Regulator’s willingness to work constructively with industry, to provide guidance and to work to understand the practical issues with the provision of advice. At a high level, a Statement of Advice provided by an Authorised Representative has less than ten formal elements that need to be covered including the advice and its basis. Admittedly, regulations and replacement product disclosures increase the depth of the disclosure but it’s a logical and relatively contained requirement. There are identification elements and structural requirements, but the bulk of the requirements relate to interests and influences that may affect the recommendation. In RG 90, ASIC confirmed that the eight core SoA elements required by s947B (SoA from Licensee), 947C (SoA from Authorised Representative) and 947D (replacement product advice) are: a statement setting out the advice (see s947B(2)(a) and 947C(2)(a)); information about the basis on which the advice is or was given (see s947B(2)(b) and 947C(2)(b)); a statement setting out the name and contact details of
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