FPC008 Financial Planning - Statement of Advice

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Statement of Advice

A statement of advice (SOA) is a document that sets out the advice given to a client by their licensed financial planner or adviser. It must include the basis on which the advice is given, details of the providing entity, and information on any payments or benefits the adviser or licensee will receive.
The purpose of an SOA is to communicate to the client important and relevant information about the advice so they can make an informed decision about whether to act on the advice. ASIC Regulatory Guide 175 (RG 175) ‘Licensing: Financial Product advisers – Conduct and disclosure’ (November 2017), notes that an SOA should clearly, concisely and effectively summarise, for the benefit of the client:
• the advice
• the reasoning behind the advice, and including:
o the subject matter of the advice the client sought
o the scope of the advice
o a concise summary of the client’s relevant circumstances ascertained after making the inquiries required by s 961B of the Corporations Act 2001 (Cth)
o a generic description of the range of financial products, classes of financial product or strategies considered and investigated for the purposes of s 961B
o an explanation of why the advice and recommendations were considered appropriate, with consideration given to alternative options, and the advantages and disadvantages (including risks) if the client follows the advice
o an explanation of how the adviser has acted in the client’s best interests.
Note: ASIC considers it is good practice to set the reasons a reasonable adviser would believe the advice is likely to leave the client in a better position if the client follows the advice.

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