Dante De Gori

The Financial Planning Association of Australia (FPA) yesterday presented the findings of research conducted by its Future of the Statement of Advice (SOA) Working Group at the 2019 FPA Professionals Congress in Melbourne.

The findings showed examples of technology and services available that can help financial planners develop more meaningful client experiences during the advice process.

Dante De Gori CFP^®, CEO of the FPA, said: “Digital SOAs are key to improving the advice experience. By adopting technology to deliver advice in a smarter, safer, and more efficient way, the best client outcomes can be reached.

“The future of financial advice delivery will be one where every client is given their own individual, tailored experience based on their unique communication and behavioural preferences.

“It will harness the power of appropriate digital technology solutions to make the experience a meaningful and more engaging one for the client. It’s about prioritising what’s best for the client, rather simply ticking compliance and legal requirements.”

To date, financial advice is typically delivered to clients as a bulky Statement of Advice (SOA) printout or at best a lengthy PDF. This often results in a less than engaging client experience and one that makes it challenging for them to fully understand the information, which can include financial jargon and disclaimers.

The government and regulators, led by ASIC, have been encouraging the financial planning profession to work towards clearer, concise and more effective documents that move in step with the advancements in technology designed to improve the end-user experience.  

This year the FPA invited a wide and diverse group of financial planning professionals – including members, regulators, compliance experts, lawyers, licensees, content and digital media specialists, and advice technology specialists – to form a Future of the SOA working group and set the challenge to create a vision of what the future SOA could look and feel like.

Importantly, the working group agreed there are no legal or regulatory barriers to members creating and delivering advice digitally.

“Our approach has been to review the SOA with fresh eyes, reassess its purpose and look into what the next decade of advice delivery could be for consumers and how it can be improved. As part of this, we explored how technology can be harnessed to improve the advice experience and progress the evolution of the SOA,” said Ben Marshan CFP^®, FPA Head of Policy & Standards.

“Numerous consumer behavioural finance research reports identify that the long-form, text-heavy way that SOAs are provided to clients does not match up with the way that a large majority of people best digest and understand complex information.

“In fact, according to the Social Science Research Network, 65 per cent of people are visual learners. Therefore this presents a huge challenge for consumers who are expected to comprehend long written and often complex documents. For example, consumers are far more likely to remember a call to action after watching a video, compared to reading it in text format.”

The FPA has been working with fintech companies to create digital SOA technology and has conducted consumer testing on digital SOA examples. All consumers tested agreed that they much preferred a digital SOA and the ability to engage with and learn from their advice rather than read paper based SOAs.

The FPA has concluded modes of communication such as video, audio, imagery, infographics, graphs and even quizzes are very effective ways to deliver advice.

“Our vision for the near future is to enable clients to engage with their own personal, interactive, real-time financial plan, in a secure portal or on a smartphone app,” concluded Marshan.

“It’s about ‘breaking paper’ – we must utilise the full breadth of digital, tech and communication modes available to allow advice delivery to be more accessible, personalised and meaningful for clients.”

Fintech companies YTML, PlutoSoft, Intelliflow, Advice Intelligence, IRESS, Financial Mappers, SalesPreso, MidWinter, and Adviser Logic will demonstrate their digital SOA solutions to members at Congress.

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