SOAs can drive customer satisfaction: PhD thesis

Simpler Statements of Advice could be the key to consumer satisfaction, an unpublished research paper by financial planner and doctoral student Ben Neilson suggests.

Neilson’s paper, ‘Investigating the Impact Financial Content Structure has on Consumer Appreciation’ – which forms part of his PhD with the University of Queensland – argues there can be benefits to SOAs if the content is structured properly.

The thesis comes as the government considers acting on Recommendation 9 of the Quality of Advice Review, which proposes eradicating SOAs, although shorter documents are more likely to be the direction the government pursues.

“Practitioners may be able to increase consumer relationships by implementing [the research] findings in professional practice,” the paper states.

Neilson, a managing partner of Neilson & Co Wealth Management in Branxton in the Hunter Valley, says he supports the QAR’s recommendation on SOAs; however, his research will still be relevant to whatever form advice documents ultimately take.

“The recommendation gives us the opportunity to re-sign and, most importantly, streamline the creation of financial recommendations,” he tells Professional Planner.

“[SOAs] take far too long to create. Consumers are just unwilling to wait [a long period of time] for a document that’s not often decipherable for them.”

As part of his research, Neilson looked at the most impactful elements of SOAs: the recommendations themselves. He found that providers can ensure more effective communication by streamlining all the content advisers tend to put in the documentation.

“Instead of having four or five pages of [detailed content, the research recommends one page containing] three impactful sentences, bullet points,” he says, adding that the things consumers care about should be included are the things that the consumer cares about.

“You can put the other stuff somewhere else. You can put it in the client file, you can put it in a hyperlink – you can put it in anything else.”

This simplification of financial content and documentation results in “a significant reduction in both creation time and content size”, according to the paper.

Antagonise and annoy

Neilson believes the most significant barrier to re-designing financial documentation is advisers’ unwillingness to accept innovation.

“How often, if ever, has an adviser gone to their clients and said, ‘What do you think about this document? Do you really think it’s worth several $1,000 a year?’” he says.

“If we simply change the content, we kick it across and we make it a document that the consumer actually wants to read. It’s literally as simple as removing unnecessary content. We’re not saying don’t include it; we’re simply saying don’t give it to the consumer in paper form.”

“If you knew [the content confused and overwhelmed] your clients, would you not want to make a change?”

Neilson admits that his research may be seen as antagonistic.

“I say these things to annoy advisers, to make them challenge us, so that we can then outline how to be better,” he says.

“Because if we’re not better, we’re dinosaurs.”

During the Professional Planner QAR Roadshow in March, Minister for Financial Services Stephen Jones ruled out scrapping formal advice documents outright.

“It is important when somebody is sitting down with a financial planner and gets a piece of advice – comprehensive or otherwise – that they walk away with a bit of paper,” Jones said.

“Even if we said they didn’t have to [give a document outlining the advice given], the overwhelming majority of licensees and financial planners would ensure they did.”

Neilson’s paper follows his first research article in May, which argued that the development of artificial intelligence tools like ChatGPT will, at best, complement professionals rather than replace them.