SOAs are read by humans. So, above everything else, they need to be human documents. Always remember: what you write down today will be read tomorrow (and the day after that, and the day after that, and the day after that). And it won’t just be read by your client: they may well show their loved ones, or their bank manager… or their lawyer.
And every time any of these people read the SOA they will think of you.
So, don’t miss this opportunity to use the SOA to build the client-adviser relationship. The SOA should be a part of a warm conversation. Yes, SOAs have to meet various legal requirements. But this does not mean that have to be written in stern, gruff legalese that comes across as an obvious attempt by the adviser to disclaim every conceivable manner in which things might go wrong. You can meet all your obligations and still make sure you grasp the opportunity to further your relationship with your client.
Effective SOAs do at least two things really well. Firstly, yes, they meet the legal requirements for an SOA. This is relatively easily achieved. Just as importantly, effective SOAs motivate clients to change their behaviour to better achieve their financial goals. Effective SOAs detail the positive steps that clients need to take to improve their situation. They give clients the confidence to trust that the advice you have given will take them where they want to go.
To achieve this, the writing must be positive: positive writing gives clients the confidence to trust the advice. Where the writing is ‘negative’ – cloaked in technical language, over-emphasising the warnings, repeatedly telling the client what not to do and what the advice does not address – the advice will be less useful. Negative writing means your clients are less likely to act on your advice. And they will be less likely to ever seek your services again.
To read more about the human aspect of SOAs, please see our Friday Reflection from October 9 2015 – Your Advice is Supposed to be Personal.
So remember: The worst SOAs read like they were written by lawyers. The best SOAs read like they were written by financial expert who also runs the client’s personal cheer squad: the best SOAs congratulate, encourage and enthuse your client.