SoA Template - FPA Sample Template

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Product Description

A FPA example Statement of Advice template has been released as a pdf version and we have converted these documents to Word version and formatted the documents for your use or review.

This FPA sample Statement of Advice template was proposed as part of a member discussion and their overview was as follows:

The Statement of Advice (SOA) is the key tool used to convey essential information about the advice provided by a financial planner to the client. The legal underpinnings require that the SOA must set out the advice, explain the basis for the advice, details about the provider, remuneration and any interests that may influence the recommendations, and prescribes additional information in particular circumstances.

In practice, however, there are several factors that have raised compliance and risk sensitivity associated with the SOA, resulting in increasingly lengthy and complex documents being produced. Although some of this additional information may be useful to the licensee from a legal perspective, many SOAs include information that dilutes the key messages of the advice and is confusing for the client rather than focusing on the relevant information the client needs to make appropriate financial decisions.

This issue is recognised by all sides of industry, government and the regulator. Attempts have been made in the past to address the deficiencies with little or limited success. The desire for a focussed industry approach, coupled with a renewed ability to streamline the information through the provision of the incorporation by reference regulations has created the prospect of breaking through existing logjams.

The FPA initiated a Working Group comprising financial planning practitioners to consider the options for simplifying SOAs and to provide example(s) of clear, concise and effective disclosure documents that are compliant with relevant legislation and regulation. The Working Group’s objectives were to develop a simple SOA in context with the two other key legally required documents, the Financial Services Guide (FSG) and the Product Disclosure Statement (PDS). All three documents are required by law but the SOA has transformed into a ‘cover all’ document to be read on its own. The emphasis on the SOA as the main source of information has raised concern for meeting the objective of clear, concise and effective communication.

While the objectives of this process are to address perceptions that arise from the legal environment, the example SOA should also be considered in the context of the broader requirements of the financial planning profession. In addition to their legal requirements, financial planners, particularly CFP practitioners, also face a number of professional responsibilities that operate above and beyond the legal framework, relating to the provision of long term financial plans and ongoing advice to implement the recommendations. The disclosure requirements of the SOA are specified in law and it is in relation to those requirements that the example SOA as set out in this paper should be considered.

The FPA is now seeking to promote discussion among the membership on the usefulness of the format defined in this paper. The draft will be reviewed in the light of this feedback and the output will be consumer tested to determine whether consumers understand it. We are also releasing two further examples of SOAs considering other scenarios to demonstrate the flexibility of the format which will be available on the FPA website,