What is a statement of advice?
A Statement of Advice (SoA) is a written document that outlines the financial recommendations provided by a financial advisor to their client. It provides a comprehensive overview of the client’s financial plan, including their financial goals, investment strategies, and the recommended products and services to help achieve those goals. A SoA is a legally binding document that demonstrates the advisor’s compliance with regulatory requirements and protects both the client and the advisor.
What is a statement of advice used for?
The SoA serves several important purposes, including:
- It is a record of the financial advice provided to the client, detailing the recommendations made and the reasons behind them.
- It helps ensure that the client’s interests are protected and that the advice provided is in their best interest.
- It provides transparency and accountability in the financial services industry, helping to build trust between clients and advisors.
Who might use a statement of advice?
A statement of advice is typically used by someone either helping or advising clients in financial services. Some examples of someone who might provide a statement of advice include:
- Financial advisors
- Paraplanners
- Wealth management firms
- Investment management companies
What are the benefits of using a statement of advice?
A Statement of Advice (SoA) is a critical document for financial advisors as it outlines the financial advice provided to a client. It helps ensure compliance with regulatory requirements, protects both the client and the advisor, and provides a comprehensive overview of the client’s financial plan. The benefits of using a SoA include:
- Ensuring compliance with regulatory requirements and protecting both the client and the advisor.
- Providing a comprehensive overview of the client’s financial plan, making it easier to track progress towards financial goals.
- Serving as a reference point for future discussions between the client and advisor, ensuring consistent advice over time.
- Building trust between the client and advisor through transparent and responsible advice.
A statement of advice is an essential document in the financial planning process. It provides a comprehensive overview of the client’s financial plan, helps ensure compliance with regulatory requirements, and serves as a record of the financial advice provided. By using a SoA, financial advisors, paraplanners, and wealth management firms can demonstrate their commitment to providing transparent, responsible, and reliable financial advice to their clients.
When is a Statement of Advice required?
When a Statement of Advice (SoA) is required is when a financial advisor provides personal advice to a client. Personal advice refers to advice tailored to the client’s specific needs and circumstances, taking into account their financial situation, goals, and preferences. This includes advice on:
- investments
- insurance
- superannuation
- other financial products and services.
It’s important to note that generic or factual information, such as market updates or product descriptions, is not considered personal advice and therefore doesn’t require an SoA. In such cases, the advisor may provide information to help the client make informed decisions, but the final decision is left up to the client.
The requirement for a Statement of Advice highlights the importance of providing personalised, responsible, and transparent financial advice to clients.
It also helps ensure the client’s interests are protected and that the advice provided is in their best interest. By preparing a comprehensive SoA, financial advisors and paraplanners can demonstrate their commitment to providing reliable financial services to clients.
Do you need a paraplanner to write SoAs?
Paraplanning services play an important role in supporting financial advisors and ensuring the quality of their services. By preparing the Statement of Advice (SoA) on behalf of the advisor, paraplanners help to save time and reduce the workload for the advisor, allowing them to focus on other aspects of their business.
Paraplanners have the expertise and knowledge required to ensure that the SoA is accurate, compliant, and meets the regulatory requirements. They are familiar with the latest financial regulations and best practices and can provide support and advice to advisors to help them provide the best possible service to their clients.
Reliable sources of information are critical to the accuracy and credibility of the SoA. Paraplanners have access to a wide range of resources, including market data, economic reports, and regulatory information, to support their work. This allows them to provide the most up-to-date and relevant information to the advisor, which in turn helps the advisor provide the best possible advice to their clients.
For more answers on statements of advice
To summarise, a Statement of Advice (SoA) is a critical document for financial advisors, as it outlines the advice provided to clients and demonstrates compliance with regulatory requirements.
Paraplanning services, like One Degree Paraplanning, can help financial advisors prepare accurate, compliant, and up-to-date SoAs.
One Degree Paraplanning was founded in 2015 by Charles Cooch with the goal of providing financial advisors with a locally-based, high-quality paraplanning solution. Over the years, the company has continued to grow and now boasts an in-house team of experienced paraplanners and a small team of contractors to provide the best-outsourced paraplanning services available.
With a focus on delivering excellence with every piece of work, One Degree Paraplanning has built strong relationships with dealer groups, financial planning businesses, and advisors across Australia, with a majority of clients in Victoria, Queensland, and New South Wales.
We invite you to learn more about Statements of Advice and the benefits of paraplanning services by contacting us online. At One Degree Paraplanning, we are committed to helping financial advisors provide the best possible service to their clients.
