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The Documents Part 8 – Statement of Advice (SoA)

Statement of Advice

The Statement of Advice is the document provided to a client where an adviser will summarise and prioritize their objectives, document the research, recommend what the client does, outline all fees, provide disclaimers and education guides and have the client agree, disagree or agree with changes on whether to proceed.

For SMSF advice this document is 25 to 35 pages long.

Retail clients who rely on personal advice may suffer significant loss if the advice is conflicted or is not of good quality. For this reason, the law imposes specific obligations on persons who provide personal advice to retail clients.

Failure to comply with the law may result in a civil penalty against an authorised representative and you as the adviser, may be subject to administrative sanctions for a breach of the obligations (e.g. being banned from providing financial services for a period of time).

A client, or ASIC, may take civil action for any loss or damage suffered as a result of a failure to comply with the best interests duty and related obligations.

ASIC is more likely to take the view that processes for complying with the best interests duty are not effective, if an advice model typically leads to a one-size-fits-all outcome that is, the processes do not allow each client’s relevant circumstances to be taken into account, or result in advice that does not reflect the client’s relevant circumstances.

The Statement of Advice document is complex and accountants will find it difficult.

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