10 tips for developing a Statement of Advice

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Paraplanners have a tough task: consistently create SoAs which tick all the boxes from an adviser satisfaction, client engagement and compliance point of view.

Balance complexity with compliance, templates with personalisation, financial literacy with reasonable basis and best interest and time constraints with quality and efficiency.

Here are a few simple tips which can assist in the improvement in the quality of SoAs.

  1. Define your audience – the SoA is for the client, however it also needs to take into consideration the other audiences the SoA is being constructed for and reviewed by including the Adviser, the Licensee and ultimately ASIC (compliance). When writing a SOA you need to wear multiple hats to ensure that the SoA delivers the contents required to satisfy each audience. The consideration of each will put a different overlay on the SOA.
  2. Make it logical to navigate– the SoA should convey info that the client needs to know in order to make an informed and logical decision. Present strategies in sequential order as they need to be implemented and explain each individual step clearly. 
  3. Keep language instructional – The purpose of the SoA is to provide recommendation, therefore language should be instructional with clear steps backed up by explanation of the reasons why the action needs to be taken.
  4. Aim for conversational tone – A SoA formally documents recommendations but does not have to be too formal in tone. A conversational approach helps to promote flow and ease readability.
  5. Avoid Technical Speak – With over 100 financial planning acronyms commonly used in the industry, it’s easy to appear as though we are speaking another language making it more complex than it needs to be. It is a paraplanner’s job to know these acronyms and then translate this into language that is easy for a client to understand.
  6. Keep in mind the client’s financial literacy – all content should be pitched at a client’s existing knowledge level. There is no point getting into the ins and outs of complex strategies within a SOA if the clients do not have the financial literacy to understand it. Similarly, if an Adviser has spent hours previously with your clients discussing the foundations of investing, asset classes, insurance, super and other fundamentals then the language of the SOA should take this into consideration. Where possible try to incorporate by reference the previous discussions.
  7. Focus on relevance – Stick to the scope of the advice. Address all elements required but don’t cover items not scoped or it will over complicate the advice.
  8. Try graphical representation of Complex Material – A picture paints a thousand words. The use of accurate pictures, diagrams, flowcharts followed by descriptive text can be more enticing to read and easier to understand.
  9. Focus on the Purpose – aim for simple and succinct, rather than a lengthy discussion paper. The most important part is that it is logical and conversational. It makes sense, it is pitched at a level that takes into account your previously held discussions.
  10. Seek feedback – although often feared, the comments and feedback from compliance can constructively improve the layout and content of a SoA. Ultimately though, we should be seeking feedback from the clients on how they rate the readability and overall presentation of the SoA so if the Adviser is willing, try encouraging them to seek this feedback as it will help you as the paraplanner to create better documents and the Adviser to provide advice to clients in a better way.

Mastering the skills to effectively write a SOA is something which many paraplanners will tell you can only be developed through time and experience. Tools such as financial planning software, templates and standard text libraries will help with the process but really it comes down to a paraplanner’s writing skills and their ability to communicate effectively.

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