The FPA’s head of policy believes advisers are looking at the Statement of Advice (SoA) the wrong way, and they need to rethink the way they approach them.

Speaking on a panel hosted by Advice Intelligence at the Hotel CBD on Thursday, Ben Marshan said one of the complaints he hears a lot from members is that no other profession has to do an SoA.

“That is 180 degrees the wrong way to think about it,” Marshan said.

Advisers are “lucky”, he continued, that when they engage with clients, they get to send them away with something that will help them understand their life.

“We are so privileged that we are – I’ll use the word ‘forced’ – to have to provide it,” he said. “We’re actually quite privileged, and quite lucky that we’ve got a regulatory environment that says we have to do it.”

Marshan contrasted advice to accounting, where documents comparable to the SoA are not required.

“How many of us understand what’s going on with our tax returns?” he asked.

Wrong mindset

Marshan explained that the reason advisers disliked SoAs was because they approached them with the wrong mindset.

“We’re looking at it the wrong way; we’re looking at it as a compliance document, as something that’s a pain and a hassle to get out.”

Part of the reason advisers don’t like SoAs, he explained, is because they know clients don’t value them.

“We’re using 100 pages that the client isn’t ultimately going to read,” he said.

The worst SoAs, Marshan said, are the ones with too much detail. The ones that “try to tick every box and make it perfect often put the client in a worse financial position”.

He noted that the advisers themselves shouldn’t shoulder all of the blame, and that the “compliance and legal functions that sit around advice” are being overly cautious with their SoA processes.