Paraplanning will evolve beyond scrapping of SOAs
The removal of Statements of Advice (SOAs) as recommended by the Quality of Advice Review (QAR) is likely to impact the workload of paraplanners, according to specialist paraplanning outfit, Mutual Paraplanning Services.
Mutual Plans founder, Silvia Wade said that while some people were concerned that the removal of a requirement for SOAs would impact the job prospects of paraplanners, the oppositive was likely to occur.
“Despite paraplanner fears, many leaders in the financial planning space feel that the future couldn’t be brighter for paraplanning professionals. New opportunities will arise for paraplanners that will allow them to use their skillset in different ways other than working on SOAs,” she said.
“Even if SOAs as they are currently known are removed, there will still be a need to organize detailed information in written form for clients. The removal of ‘template’ SOA structures and restrictions may mean good paraplanning firms will be able to differentiate further, establishing greater value-add with their ability to articulate complex information concisely,” Wade said.
“A good paraplanning firm will also ensure their documentation offers an Advisor appropriate protection, without the need for excessive legal language.”
“Besides generally reducing costs, part of the reason SOAs may be removed is that many clients don’t find enough value in reading through an SOA. SOA documents have traditionally been long-winded documents with a one-size-fits-all templated approach,” Wade wrote. “Some people may prefer simply to talk through and understand the advice they are getting and why it would benefit them. If this can be done without a long SOA involved, then the QAR feels that financial planners should be able to.”
She said that if the removal of SOA requirements took effect, in-depth consideration of what needs to be on record for the client would need to take place and how the new information is presented to the client would also need to be considered.
“Advisors will need to be properly trained on both of these new protocols, as this will make sure that they are able to provide effective and clear advice without the SOA,” Wade said.
“While the removal of SOAs could lead to significant changes to the daily role of a paraplanner, they shouldn’t fear the change. They will only become a more critical role in supporting Australians’ access to quality financial advice.”
“As paraplanning moves away from the more clerical duties they’ve focused on, the roles that these professionals will hold in the future is still somewhat unclear. Paraplanners may take on more advanced roles and support higher levels of planning and analysis, relying more on their expertise in financial strategy and crafting insightful, concise, and tailored documents.”
Paraplanners have nothing to fear. My large dealer group told us SOA’s will remain. They also said that every other dealer group they had spoken to agreed, and so did their PI insurers. We still need to meet the code requirements and ASIC’s record keeping obligations. Can’t do that without an SOA or a similar document. The recommendation to scrap SOA’s was never about advisers anyway. It was a trick to fool the gullible associations into supporting QAR and to allow insitutuons to give verbal advice over the phone.
Jimmy Dee,
I wouldn’t listen to your large dealer group. As most are going broke. And looking to either modify their model or get out all together. EG AMP
As to PI insurance there is very few players left now. I doubt their in, in depth talks with License’s yet. As they haven’t seen the details yet.
Perhaps these changes will encourage more back into the PI space, as their risk is clearer and potentially mitigated.
For example Best advice going to good advice. But its early days.
But for me, yep SOA are gone. Because commercial pragmatism will eventually win the day and your large licensee knows that.
[…] years ago, we predicted that the removal of SOAs would make professional paraplanning services more valuable, not less. As […]