Preparing a Statement of Advice
A statement of advice is a document that records the personal financial advice provided by a financial planner to a retail client. It is a key disclosure document that helps the client understand what advice they have been given and decide whether or not to rely on it.
Why is a Statement of advice required?
The information included in a statement of advice should be clear, concise and effective. A ‘clear, concise and effective’ statement of advice will explain the personal financial advice that was provided to a client in a way that is easy for them to understand.
‘Clear, concise and effective’ means:
* Provides a lot of information in a few words; brief yet comprehensive.
Also, it should present information in a logical sequence so that the client is able to understand it easily.
‘Clear, succinct and effective’ is a term used to describe a statement of advice that is written in plain language, and it should be brief but comprehensive in providing the information required for the client to understand the adviser’s recommendation.
When it comes to preparing your Statement of Advice, it’s important that you follow the right process.
The right process is one that takes into account your client’s experience, language skills, literacy and numeracy. It’s also important that you tailor the language in your SOA to the client and remove any irrelevant information.
The SOA should include information on your clients’ objectives, financial situation and needs as well as the strategies and financial products that you recommend. It should also include a description of the risks associated with the recommendations.
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