Chapter 03 – The Statement of Advice preparation process – Superannuation

Step 1. Get to know your client

This step involves the provision of a Financial Services Guide, the client’s completion of a fact finder (note it is the client who is supposed to complete the fact finder), gathering the supporting documents for any existing superannuation funds (member statements, PDSs, etc) and a meeting with the client to discuss their needs. The result of this meeting should be to have determined the amount and type of the risk insurance required.

At the end of step 1, the adviser should have the following documents on file:

  1. Signed acknowledgment that a FSG was provided;
  2. Signed fact finder in the client’s handwriting;
  3. Member statements setting out the details of any and all existing superannuation accounts;
  4. PDSs setting out the details of all existing superannuation accounts;
  5. File notes detailing the areas that will be researched. The best kind of file note is one that is sent to the client as an email. That is contemporaneous and establishes the client’s acceptance of the contents of the note.

Step 2. Do your research

This involves assessing whether the client will benefit from either:

  • Maintaining their current superannuation accounts;
  • establishing a new superannuation account into which to receive future contributions; and/or
  • moving existing superannuation benefits from one fund to another.

This step also needs to be properly documented such that any further advice is clearly shown to be in the client’s best interests.

Step 3. Select the preferred fund/s

This step involves choosing the preferred super fund or funds, and the amounts to be held within each type, based on the results of steps one and two.

Step 4. Prepare a Statement of Advice

The statement of advice needs to be prepared showing the recommendations regarding the client’s superannuation benefits. The SOA then needs to be lodged with Dover Compliance for review before being made available to the client.

Once approved by compliance, the SOA can be sent or given to the client. Only then can the client sign an authority to proceed as discussed in the next step.

Step 5. Gain the client’s authority to proceed and commence implementation.

The approved SOA can then be presented to the client and their authority to proceed gained. Any documentation required to implement the advice can now be commenced.  

The client must not sign any implementation documents prior to the acceptance of the SOA.

Step 6. Respond to any issues that arise during implementation.

It is not uncommon for issues to arise during the implementation phase of the advice process. Any material issues will require a Record of Advice to be completed. The ROA needs to refer to the original SOA and it needs to set out all material changes to the original SOA.

In the event of such a change, the ROA needs to be prepared, reviewed by Dover Compliance and agreed to by the client before the implementation is re-commenced.

The Dover Group