Not including a Product Disclosure Statement in your SOA

These days, this mistake is unforgivable. S1012A of the Corporations Act, as well as ASIC’s RG 168, oblige all advisers to provide their retail clients with a PDS for any and all recommended financial products. There are no exceptions.

The simplest way to meet this disclosure requirement – and, just as importantly, to document and demonstrate that it has been met – is to include the ‘hyperlink’ to the PDS in your SOA. Put simply, every SOA should include the hyperlink for every recommended product, as well as the advice that the client take the time to read it. Something like the following is a good way to proceed:

You should download and read the product disclosure statement (‘PDS’) for this product. The PDS contains all the information that you need to make an informed decision about the investment that we are recommending. It details the investment strategy that will be implemented, the costs associated with the product, the taxation treatment of income and capital gains generated by the fund and various other important pieces of information regarding the governance and management of the recommended product.

The PDS can be accessed here: Vanguard PDS

We cannot stress enough the importance of you understanding every aspect of the product we have recommended. Please take the time to read the document and feel free to ask us any and all questions that you may have with regard to its contents.

Using the hyperlink takes virtually no ink and almost no time – the link is simply cut and pasted from your internet browser. But the link creates a clear, unambiguous record that the adviser has met his or her disclosure requirements.  This lets you as the adviser not only do the right thing – it also lets you prove that you did the right thing. Which, from your point of view, is equally important.

The Dover Group