How to Fill Out TNW Solutions SOA Request Form
A Statement Of Advice (SOA) is one of the most important documents a financial advisor or planner prepares. It sets out the relationship between the advisor and a client, detailing the client’s financial situation, what the objectives are and how they will be achieved. It clearly sets out a financial plan so the client can properly understand what it entails and is able to make an informed decision.
It’s important that an SOA request form is filled out correctly, with no mistakes or omissions, and provides the information that a client needs. This is dependent both on the advisor being familiar with the requirement and the client providing the necessary details.
What an SOA Needs to Contain
According to the Australian Securities and Investment Commission, an SOA must set out details of the advice given to a client, why it was given and the likely benefit to the client. It must also provide identification and contact details for the advisor and any payments that the advisor will receive for providing the service. The SOA has to conform to the requirements of the Financial Services Reform Act (2001) and sections of the Corporations Act. The latter states that the SOA has to have clear content that the client can understand, that the provided information must be comprehensive yet concise and that it must be effective in producing the result that is intended. The document, therefore, has to use plain language that avoids technical terms and industry jargon.
One aim of the SOA is to enable the client to make an informed decision on the advice given. To achieve this, the information provided must include:
- date the advice was given and a description of the type of advice provided
- a summary of the client’s financial position
- obligations to provide advice in the best interest of the client
- the scope of the advice provided
- type of product or service offered and whether these are restricted to those on a particular list
- authorised advisor information, including name and contact details, Australian Finance Services Licence number and the state where the advisor is licensed to operate
- personal recommendations for investments, funds and insurance, with options
- why the advice will leave the client in a better financial position
- why the advice is appropriate, covering alternatives considered, risks, tax considerations and any advantages or disadvantages
- information about commission payments and any other remuneration or benefits the advisor will receive for providing the service.
Preparing Accurate and Complete SOAs
To be fully effective, an SOA has to be based on accurate and complete information. When the information is incomplete, the SOA must clearly state this, so the client is properly warned. The dependability of the SOA is therefore based on the skills and knowledge of the person who completes it and the information provided by the client.
Templates are sometimes used to help in the preparation of an SOA, and these can be invaluable tools. However, they don’t allow for each client being different in terms of their financial knowledge, understanding of the language, what they require and several other factors. Each SOA, therefore, needs to be specifically tailored for them and templates aren’t sufficiently flexible to allow this and so only the simplest templates tend to be of use as a guide.
It’s generally best to use someone who is experienced, knowledgeable and up to date with regulations when preparing an SOA. Although this can be a financial advisor, sometimes it’s better to use a paraplanning service such as TNW Solutions. This frees advisors to do other things while ensuring the SOA is correctly completed and satisfies all needs.
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