1. Proofread your advice
While this tip sounds obvious, we have found through our reviews that it often gets overlooked. It is important that you proof read your work to ensure you have included everything you wanted to say in your SOA and ensure that your SOA looks and sounds professional, while being easy for your clients to understand.
Some helpful tips for proof reading your work:
- Read it aloud and silently.
- Use a spell checker and grammar checker as a first screening, but don’t depend on them.
- Have others read it.
- Double check correct names (and their spelling)
2. Use simple English
Often, we see SOAs that try to use fancy language and long wordy paragraphs to impress their clients. Practically speaking, the best SOAs are written in ‘plain English’. Meaning they are simple, concise, consistent and free of industry and/or legal jargon. This allows you to effectively show your skills to your client and focus them on the important issues, rather than unnecessary fluff.
Our tip for writing in plain English is to stop and think, “will my mum understand this”? If the answer no, then rewrite your advice.
Please have a read of the following link for more information:
3. Scale your advice appropriately
Scaling the advice does not mean you can walk away from your obligations to give appropriate advice that is in the best interests of your client.
When preparing your advice, you should consider whether you have enough information to provide proper advice to your client. Limiting your advice to a product recommendation can be seen as inappropriate scaling, especially if you have unduly limited your inquiries for the sake of providing product acquisition or replacement advice.
4. Tell us why
There may be a good reason why you are advising your client to do something. If you haven’t explained it in the SOA, then we may reject the advice on the grounds that it is not in the best interests of your client. For example, simply retaining a client’s default cover, and also recommending new insurance outside super without rationale as to why this was a suitable option for the client is considered poor advice.
5. Tailor your advice to your client’s circumstances
Your advice must adequately consider your client’s personal circumstances and needs. This means identifying your client’s priorities, understanding their needs and assessing their financial position.
This means that you need to consider different strategies. A strategy that may have worked for one client may not work for another; after all, no two clients are the same. Some clients may want to only cover their debts, whereas some clients want to provide replacement income for their family too. You need to make this assessment before drafting your advice.
ASIC makes specific mention of their condemnation of one- size- fits- all strategies. Avoid the trap. Tailor your advice to your client’s personal and financial circumstances and refrain from providing advice that is nonsensical. You should be deriving strategies that are reasonable for your client given their specific set of circumstances.
This means that your investment advice will need to be in line with your client’s risk profile (given their risk tolerance), that your insurance recommendations are appropriate to your client’s net wealth and stage in life, and that your advice addresses your client’s needs- even if it is met with non-financial product advice.
Please have a read of the following link for more information: https://www.professionalplanner.com.au/fpa/2017/11/27/whats-in-an-soa-in-best-practice-only-what-needs-to-be-60400/