Lengthy plans disengaging clients from advice

Clients are disengaged with lengthy financial plans and could benefit from a clear and concise, one-page overview in order to understand and value the advice received, according to Astute Wheel.

Johann Maree, Astute Wheel practice development manager, said the adviser-client experience had changed over the years.

“For many years, financial advisers have delivered the same advice experience to their clients and although many financial advisers love the analysis this – and the 50 plus page legalistic financial plan – does not engage their clients,” he said.

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“What clients want is an executive summary – a bottom line and solution to get them where they need to go. By having a digital and client-friendly one-page overview of the client’s position, advisers can creatively and collaboratively engage with their clients all the while determining the relationship between income, expenses, assets and liabilities, as well as determining how the clients are funding for what matters to them.”

Clients’ expectations from communication from their adviser had also changed from periodic meetings to ongoing guidance which provided greater insight into investment portfolios. This included the use of secure portals where they could view their portfolios online.

He said clients most valued the financial advice they received when it allowed them to achieve peace of mind and fulfilment rather than simply focused on money management and financial goals, particularly if they related to complex financial situations.

“Meaningful engagement happens when clients can be involved in the process and see in real time how their world can be positively changed for the better,” Maree said.

“The discovery meeting is unashamedly all about the clients: discovering their story, understanding why they made their financial decisions, working through their values and goals and putting meaning to their money.

“By redefining the service proposition and enhancing it with a digital overlay, advisers will continually remind clients of the value of advice and entrench the adviser-client relationship, build trust and business growth in ways which extend beyond the annual progress meeting.”




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Hi Laura, Perhaps some further research would tell you that NO Adviser loves a 50+ page legalistic report and ALL advisers would - in a heart beat - provide a shorter, simpler, more specific and to the point letter to the clients explaining the advice (and the many hours of research prepared to formulate it). Beware of tech companies stating what advisers want and do - this is in their interest and not advisers.

It is not ASIC or the government's fault that SoAs are 50 pages long - blame the adviser/licensee/template writer.
If advisers (a) read the legislation/ASIC RG175 about what what must be in an SoA (b) read the SoA /information/examples ASIC has published, eg limited advice (c) took affirmative action to change their method of writing an SoA so that it is personalised, life would be much easier for everyone. It isn't hard to write an SoA recommending a client switch super funds or invest in a managed fund that is not 50 pages long.
The trouble with this industry is that everyone just presumes what everyone else is doing is correct and therefore 'if I do it I am correct'.
Advisers say that the cost to produce an SoA is the significant cost to the client. Shorter SoAs = less time / cost to produce = reduce client fees = financial advice is more affordable.

really good point! Advsers just copy each others templete, i have sen mine reproduced years later.

With grammar and spelling errors as well?

Yes you are correct - short stuff and regular reporting from advisors is what is wanted and useful.

Licensees don't mandate long, complicated, SoAs because the law requires it. They do so because regulators are biased and have lots of discretionary power. Regulators can easily persecute an adviser based on some trivial omission in an SoA, even if it's not relevant to the client's situation and the advice is clearly in the client's best interest. Most SoA content is designed to protect the licensee and the adviser from bias driven regulatory persecution.

Advisers know what clients really want. Advisers don't need some technology product flogger to lecture them on it. But in an environment where regulators are more focused on adviser persecution than they are on the needs of consumers, it's just too risky to abandon the protection associated with long, complicated, SoAs. Yes, a minority of advisers will take the risk, but it's like a cricketer going out to bat without pads or a protector.

The solution is not technology. It's not education. The solution is fair and impartial regulators.

I have worked as a financial planner pre FSRA. Our Licensee had a relatively short SOA with sufficient information that clients wanted. It gradually became longer as ASIC wanted this and that included when they reviewed advice probably when a client complained and they had to find a way to blame the Adviser/Licensee.
This is why we are at this point with long SOAs which discuss every minor issue that no one but the auditor reads!

You can't blame advisers, licensees etc from trying to protect themselves.

Yes shorter SOA's are a great thing, but the main causative factor for these long documents is the complaints mechanism.

I really don't like your post at all.

It says that we don't know what RG175 is. We do.
It says that we haven't read the ASIC examples. We have.
It says that our advice is templated and not personalised. Not true.

You also suggest that we are just a bunch of sheep following the other sheep. Get stuffed.

The only thing I agree with is your last paragraph.

It's not whether ASIC or the law make these changes, it's whether compliance departments and dealer groups feel safe enough to allow this to happen.
There's too many people who's jobs (compliance, remediation, government bureaucracy) rely on the continuing confusion to stay employed and while we can get our asses sued off for looking at a client the wrong way who can blame them?
I do wonder if the pendulum will finally start to swing in the other direction and these sorts of things will make our life easier but too much would have to change for them to let go of the sledge hammer approach!

I designed my SoA template in 2002 before the ASIC RG's were issued. I've been writing (hand writing) SoA's within that template for the last 20 years. They are only about 15 pages long and that includes copious amounts of white space that ASIC requires.
BUT, I only use SoA's when I am recommending the purchase/sale/switch of a product. Not every communication with my clients is an SoA. I write far more reports on the economic environment within which the investment portfolio sits, and the reasons why a portfolio has performed in the way it has than I do SoA's.
I doubt this approach would be approved by ASIC, but I've never had a client tell me they couldn't understand what I had written. Nor have I ever had a client leave my practice because of the paper warfare.
There is definitely a solution to the lengthy SoA templates produced by legal teams. If sufficient numbers of non-aligned advisers survive after 2025 we may even see shorter SoA's emerge, but not while the compliance teams at large practices try to come up with SoA templates which address every issue known to man/woman.

Thank you Johann Maree for stating "the bleeding obvious". You must be a new boy on block. I have been in the business for over 40 ears and watched it morph from a simple understandable and short SOA, into the monster document it is today, putting Tolstoy's "War & Peace" to shame in terms of length. Every thinking adviser would love a simple standard template for an executive summary but then you run into problems with ASIC (Reg. Guide "choose a number"), PI Insurers, etc. If just one little aspect of "best interest" duty is missing, you are directly in the firing line from ASIC, FASEA, TPB and the PI insurers. If you could get everyone around the table to agree on a standard industry format, that would be wonderful but everyone's afraid to do it in case they miss something outand the finger is pointed at them. To ASIC's credit, they did have a go with an SOA several years ago, which was singularly unimpressive (they should have spoken to real advisers at the coalface). Ideally, you have to get all parties together to agree on a standardized basic format, so any variations or more complicated advice can be tacked on if required. I do wish you the best of luck but I can't help but think you are on a fool's errand.

Nailed it .... and what have the Industry Associations (FPA, AFA etc) been doing along the way ???

I always provide an advice in a nutshell one pager, this isnt new at all, its hardly groundbreaking, I hope they dont get paid to come up with these rehashed ideas. Clients want this they dont want that, coming from people that dont actually have clients. So many hangers on, oops I mean experts. These people assume we are all incapable of client engagement, well we are actually specialists at it thats why we are advisers and still operating. Tell us something we dont know, that would be useful

I would expect more reliable ‘expert’ references from MM as representative of our great industry. I’ve been working with, advising and reviewing advice templates for 20 years and I can tell you the resistance to change in the length of the SoA is not the regulator itself. Everyone wants it’s shorter until you start culling it and then the nerves kick in. We have short, sharp SoAs on subscription through our business. I advocate for the reduction of SoAs to create clear and concise communications…and they always have a succinct executive summary. If you want an unpaid unbiased ‘expert’ opinion, I’d be happy to help.

Thanks for the most enlightening of info Johann, have you expressed your deep intellect to ASIC, AFCA, FARSEA / FSCP, Frydenberg / Treasury, just a few of the Advice Regulatots that demand such useless SoAs

You can fix the long SOA problem by fixing AFCA. When a professional adviser, us, is guilty until proven innocent and then once proven innocent still laible for all costs, of course they will always try and protect themselves.

If AFCA puts some of the resposibility on the clients for having a genuine issue, rather than the client knowing they can try for whatever they want and it will cost them nothing if they fail, we might start to see some practical SOAs creep into the world.
All I can say is thank god more dodgey clients don't know how exposed and at risk advisers really are.

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