How long does it take to write a Statement of Advice

Having met a lot of advisers, the question “how long does it take you to do a Statement of Advice?” is still one which perplexes me.

It’s like asking “how long is a piece of string?” without ever having seen the piece of string and unfortunately can show a lack of understanding by the adviser on the behind the scenes advice process. Similarly, a simple answer of “about 4 hours” by a paraplanner in an interview can show a lack of understanding of the various factors that go into the preparation and completion of a Statement of Advice.

To answer this question, we asked the members of Paraplanning Network Australia for their insights into “the key factors that impact the time it takes to generate Statements of Advice,”  Some of these insights follow:

1. It’s all about the integrity and completeness of data – a fully completed fact find is a good place to start, but often additional information is required when it comes to research and developing recommendations for a SOA. Having a checklist to ensure you have all necessary information, obtaining an Authority to Access Information and asking clients for current investment, loan, insurance and super statements from the outset can all help to speed up the paraplanning process. 

It’s also important to consider who is responsible for obtaining any required information and consider what their workload is. How long will the task sit in their “to do” pile and add to SoA turn-around time?

2. Am I making myself clear? – Noreen Les, Senior Paraplanner at Circle Paraplanning Services  says “One of the main factors for me is the quality of advice notes and documents provided by the adviser, i.e. the level of detail they provide and the personalisation, specific to client goals and why the advice is being provided to address those goals.”

To build a strong reasonable basis and create a more personalised Statement of Advice, the adviser can assist the paraplanner greatly by providing clear and concise instructions outlining discussions with the client; their specific goals and objectives.

3. Relationship is the key – it’s important that the paraplanner understands the adviser’s preferences for style and tone of advice.

“This includes how to interpret what an adviser is saying and writing/developing these into legible recommendations in a compliant SoA… if you don’t have a good understanding with the planner, there can be a lot of time spent making changes and updates to the SoA, even doubling the time spent sometimes.” – Lindsay Ross, paraplanner and owner at Wealth Leaders Pty Ltd.

Customising standard text can be a worthwhile exercise to reduce the time spent re-writing text that the paraplanner has written.

4. Templates, templates, templates! We all know the benefits of having templates in place, however if these haven’t been reviewed for some time then these can often become more of a hindrance than help to a paraplanner, with considerable time wasted editing and re-formatting a document.

“The more complex the plan the greater the need to stray from standard text and the need to develop own wording. This can take extra time if the adviser does not concur with the style that this has been written by the paraplanner,” says Quinton Sosnowski, Technical Specialist at Managed Financial Strategy.

5. It’s complicated! – The more complex the strategy, the more time spent by the paraplanner on researching the technical aspects, legislation, ramifications and compliance requirements and analysing the cost benefit of particular strategies. In situations where multiple scenarios are considered, this then further increases the preparation work for a SOA undertaken by the paraplanner.

To assist your paraplanner with this process, ensure that you are utilising the resources available to you, are you sharing these with the paraplanner? Does the paraplanner have access to the support services of a technical team to assist in the strategy development, or have similar strategies been recommended in the past, especially where you have been comfortable with the way the strategy was presented and explained in the SoA? Assisting the paraplanner in these ways can cut down the time it takes to develop complex advice documents.

6. Have you ever considered modelling? – Projections are an integral part of the paraplanning process. If a paraplanner is not confident with the calculator or software then errors are easily made and time is easily wasted. The key to a paraplanner being able to complete modelling efficiently is mostly in the accuracy and level of data provided and how confident they are using the calculator or tool.

One tip to make the process simpler is to provide a list of default strategy, investment return and general assumptions to be used for all projections. This helps to build consistency in your projections, reduce errors and more easier identify where data has been incorrectly input.

7. How about the software? – A paraplanners lack of experience or familiarity with financial planning software can double the generation time of a SoA.  “Financial Planning software is really a paraplanners domain. They’re going to use it more than any other employee,” says Dave Perry – Director at Accurate Admin Solutions Pty Ltd.

“I think one of the biggest factors in determining the time it takes to prepare advice is how good the templates are and your ability to “feed” data into them. If they are not particularly well designed and linked to the data sections within the paraplanning tools, you spend a great deal of time editing SOA’s,” says Noreen Les.

It’s vital that your paraplanner keeps up to date with upgrades and changes to the financial planning software and that they are provided an opportunity to attend additional training to up-skill and speed up the time it takes to use the tools, modelling and template wizards.

At the end of the day, there is no one size fits all when it comes to the time it takes in preparing Statements of Advice but there are many factor that impact on timely preparation. Identifying the part in the advice process where the time lag occurs, fostering better communication with your paraplanner and reviewing your templates and standard text could all help to streamline the process, reduce turnaround time and assist in building a better quality Statement of Advice.