Ensuring that financial advice is effectively communicated to clients is crucial in the financial planning industry. Peer reviewing Statements of Advice (SoA) before presenting them to clients can help prevent misinterpretation and confusion. At a recent conference in Sydney, a panel highlighted the importance of conducting quality assurance checks on SoAs, preferably by a trusted colleague or external compliance team.
Simon Russell, founder of Behavioural Finance Australia, emphasized the need for advisers to empathize with clients when crafting SoAs. He stressed the significance of using language that clients can easily comprehend, even suggesting embedding professional terminology in templates to streamline the process while maintaining personalized advice.
Amanda Mark, co-founder of MIntegrity, supported the idea of peer reviews but cautioned against the risk of creating templated advice that may not be tailored to individual clients. She noted that even with a second review, crucial changes could be missed, potentially compromising the client’s best interests.
James Dickson highlighted the complexities of providing insurance advice, urging advisers to offer updated and tailored advice, especially when clients’ circumstances change. He suggested documenting the rationale behind policy changes to ensure clients understand the implications of their decisions.
Mark echoed the sentiment that SoAs should evolve with clients’ changing needs, emphasizing the importance of personalized advice over templated solutions. She stressed the need for clear and concise language in SoAs to educate clients and enable them to make informed decisions in their best interests.
Addressing the challenge of balancing clarity with education, Mark emphasized the need for advisers to explain complex strategies in a way that clients can grasp. She underscored the fundamental goal of empowering clients to make informed decisions that align with their financial goals.
Overall, the consensus among industry experts is that peer reviewing SoAs can enhance the clarity and effectiveness of financial advice. By adopting a client-centric approach, advisers can ensure that SoAs are tailored, comprehensible, and in the best interest of their clients.
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