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- 01 – Introduction
- 02 – Compliance – Disclosure
- Fudging on commissions
- Not being clear, concise and effective
- Not declaring referral fees payable
- Not declaring referral fees receivable
- Not including a Product Disclosure Statement in your SOA
- Not separately stating what the adviser’s fee is
- Not using a logical sequence in the SOA
- Not using whole dollar disclosure when disclosing fees and costs
- Not utilising Dover’s Client Information Policy
- Poor presentation of remuneration
- Relying on a PDS (without doing your own research)
- Using jargon that is hard to understand
- 03 – Compliance – General
- Back dating documents
- Inappropriately high fees
- Listing non-assets in the assets column
- Losing (or never having had) the Fact Finder
- Making promises that an adviser can’t keep
- Not considering all the relevant factors when recommending investments
- Not creating records of conversations and other client instructions
- Not issuing a new SOA when the situation warranted it
- Not knowing what you don’t know
- Not saying what you don’t know
- Not setting out the scope of your advice
- One size fits all
- Overstepping the boundary
- Preparing an inadequate Record of Further Advice
- Preparing an SOA for a small investment
- Preparing an unnecessary SOA
- Recommending investments not on the Approved Products List
- Taking forever to create an SOA
- Taking forever to implement the advice
- Using snail mail and hand delivery … and nothing else
- 04 – Compliance – Know your client
- (Mis)Using risk profiling software
- Failing to state why a SMSF suits a client’s circumstances
- Increasing everyone’s amount insured
- Not incorporating the client’s age when considering whether the advice is appropriate
- Not incorporating the client’s gender when considering whether the advice is appropriate
- Not matching the advice to the client profile
- Not taking extra care for elderly clients
- Unwarranted departures from conservative advice
- 05 – Compliance – Product switching
- Not clearly demonstrating why a more costly product has been recommended
- Not clearly saying why an investment product with lower historical returns has been recommended
- Not demonstrating that the new product has been adequately researched
- Not detailing the better expected investment returns in a new product
- Not stating EXACTLY why a switch is being recommended
- Not stating how a new product better meets a client’s risk profile
- Presenting features as benefits when recommending a switch
- 06 – Life insurance
- Being unrealistic when it comes to insurance premiums
- Factoring Centrelink in as a source of income protection for low-income clients
- Not considering industry funds for life insurances
- Not considering life insurance within super
- Not considering whether life insurance should be held within a super fund
- Not ensuring continuity of cover when changing insurance policies
- Not explaining the difference between Agreed Value and Indemnity Policies – and why one has been recommended
- Not explaining the difference between Level and Stepped Premiums – and why one has been recommend over the other
- Not explaining why the more expensive Level Premium has been recommended
- Not recommending any Income Protection Insurance when even a little would do
- Not using the Income-Protection ‘Insurance’ that a client already has
- 07 – Managing the client relationship
- Forgetting to say “What Comes Next”
- Missing the “Sweet Spot”
- Missing the Advice part of the Statement of Advice
- Not addressing the SOA and the invoice to the appropriate recipient
- Not advising the client that (part of) a fee was tax deductible
- Not taking credit where credit is due
- Writing in Legalese. English is better
- 08 – Presentation
- Constantly using the client’s name throughout the SOA
- Incorrect use of colons
- Leaving large amounts of blank space
- MisUsing Capital LETTERS
- Mucking up the tables
- Not being consistent with font-size and colour
- Not double-checking things like the client’s details
- Not editing your tables sufficiently
- Not labelling and then discussing graphs and tables
- Padding out the front of the SOA
- Picking the wrong synonym and other phonetic errors
- Poor presentation
- Poor proofreading
- Poor use of the page
- Talking too much without actually saying anything
- Using graphs with meaningless timeframe’s
- Using hyperlinks that go on forever
- Using pointless graphs
- Using the word ‘Deductable’
- 09 – Strategies
- Diversifying to the point of indexation
- Forgetting that a couple is married when one spouse starts a business
- Ignoring the expensive credit card debt
- Ignoring the Home Loan
- Ignoring the Old Age Pension (or any other Centrelink Benefits)
- Letting the bank advise on debt
- Missing the low-hanging fruit
- Misusing a financial windfall
- Not considering Centrelink-preserving strategies
- Not observing a prudent minimum holding period for growth assets
- Not preparing your client for when (not if) they turn 60
- Not realising that a CGT or stamp duty event may be triggered
- Not recommending a transition to retirement pension
- Not recommending an interest offset account
- Not seeing Centrelink as the asset that it is
- Not telling clients to marry someone older than them
- Not thinking about property (1)
- Not thinking about property (2)
- Not using cash budgets to plan for reducing home loan
- Putting all the eggs in one (legal) person’s basket
- Putting all the eggs in one fund manager’s basket
- Recommending the wrong investment to the wrong client
- Rushing a SMSF gearing strategy
- Taking an SMSF offshore
- Thinking that nothing can be done to help an old aged pensioner
- Using insurance bonds to save for school fees
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