Paul Barrett and Simon Hoyle

Having turnaround times for statements of advice (SOAs) stretch out to between 12 and 30 hours leaves the process ripe for disruption according to CoreData’s head of market insight Simon Hoyle.

Speaking on the Professional Planner Principals in Practice podcast, Hoyle said the length and variation of time it takes to prepare SOAs is “absolutely startling”.

“It takes about 12.5 hours to do a simple statement of advice but that ranges from a low of three hours to a high of 30. This sort of variation in process could kill a business. How do you systemise processes while customising advice?”

Joining Hoyle on the podcast sponsored by BlackRock, AZ NGA chief executive Paul Barrett said higher SOA times are a symptom of a lack investment in the business.

“Problems like turnaround times for SOAs are not difficult problems to solve,” he said.

“Services businesses don’t have to manage inventory or stock, they don’t have accounts payable and receivable, they don’t have freight and logistics costs or complex distribution channels or warehouses to keep things in.”

Last November Iress released its inaugural Advice Efficiency Survey which found it took advisers an average of 8.1 hours to produce a simple SOA for a new client, while a complex one took 14.6 hours.

Under review

SOAs will be examined as part of the Quality of Advice Review, which finalised the terms of reference last week.

In November 2020 ASIC consulted the industry on how to make advice more affordable for consumers with SOA preparation being cited as a major hindrance.

The regulator received an “unprecedented” 466 submissions from the industry during the consultation process.

ASIC promoted Records of Advice as an alternative to SOAs in certain circumstances with the latest guidance on how they should be used released last November.

Barrett said the process of creating an SOA should not be complicated.