Melbourne dealer group Lonsdale Financial Group has proved that Statements of Advice (SOA) do not need to be long and complex, reducing their disclosure documents to just 10 pages.
Lonsdale head of compliance Lucille Bennetto said she had created 36 SOA templates for the dealer group to use in all advice situations.
“I started producing templates to give the [Lonsdale] advisers a tool to meet what the law required,” she told the Financial Planning Association’s Victorian State Conference.
“I looked at what the law said on SOAs and rolled out a menu of 36 templates, which covered general advice through to limited advice.”
Bennetto said the templates delivered a number of results for the dealer group.
Firstly, the templates removed the responsibility of producing a SOA from the adviser, and gave them more time to deal with clients.
“This gave them the shape of the document and they just had to add the strategy,” she said.
“I think I made their lives easier as it took the worry away from the adviser about what to put in.”
The big advantage of the templates was that the SOAs became shorter, with the standard documents at just 10 pages and the biggest template, for self-managed superannuation funds, just 22 pages.
The shorter form SOAs are sure to meet the approval of the regulators. In response to a bevy of complaints from financial advisers who felt that over onerous regulations were forcing them to produce SOAs that were 80 or even 100 pages in length, ASIC has undertaken a project to produce a ‘model’ SOA, to prove that compliance can be achieved, without lengthy disclosure documents.
The model disclosure document, due to be released next month, is expected to run to no more than 12 pages.
“All you need to do is produce something the client can read and understand,” Bennetto said.
“As a lawyer I used to give my clients a letter of advice with an idea of the costs, so planners just need to give their clients something that is intelligible.”
Bennetto said all the law requires of SOAs is a summary of the advice given, and a generic description of the products to give the client in writing a good explanation of what their options are.
“You don’t have to put the fact find in the SOA, you just have to give a summary of what advice you are giving,” she said.
“You don’t have to put down how many kids the client has, or their ages, the client knows that.”
She added: “My test for a SOA brought to me by one of my advisers is: If I don’t want to read it, the client won’t.”
