SoAs are alienating clients

SOA/FSC/statement-of-advice/

31 March 2021
| By Jassmyn |
image
image image
expand image

Statements of advice (SoA) have become big, alienating, and defensive documents that are more likely to increase the anxiety of consumers who are accessing advice for the first time, according to a panel.

Speaking on the Financial Services Council’s (FSC) webinar on financial advice, the council’s policy manager for advice, Zach Castles, said SoAs bombarded people and created more anxiety for first-time advice users rather than reduce financial anxiety.

“We’ve got to look at ways of having a more scalable or improving that aspect of the process so that they feel needs are being met so that it is broken down so that consumers understand rather than serving up quite comprehensive paperwork that could be high quality but missed in quite fundamental consumer awareness,” Castles said.

Also on the panel, research consultancy Pollinate’s head of society, Pamela Souvlis, said consumers saw huge amounts of documentation as just fine print to help firms cover themselves.

“They don’t relate to a huge amount of documentation with trust – that’s the misconception,” she said.

“There’s two types of trust, there’s the confidence trust – is this person skilled, qualified, is there a professional and regulatory body behind them? And then there’s relational trust.

“Trust is a big bucket and a whole lot of documentation does not necessarily build that trust. There are probably better ways to get consumers to get a sense of trust and feel their backs are covered other than a whole lot of documentation. Frankly, most of it is hard to read and not clear.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 1 week ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 6 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks 2 days ago

ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay....

3 days 21 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5