SOAs aren’t worth the paper they are written on…

I love to fly. Always have.

Got my fixed wing license in ’84 and my rotary wing license in ’87. Great fun.

I haven’t flown much of late, due lack of time and need. That’ll change in time.

I particularly love the flight planning and executing the plan. Even though you know that as soon as you approach the aircraft, your plan is bound to change – the re-planning never stops until you switch off at your destination.

Despite plans always changing, I’d never dare take off without one.

So too with Statements of Advice – but you wouldn’t know it.

Like flight plans, Statements of Advice are out of date the moment they are created. Things change and move on. The plan isn’t a prediction, it’s a guiding document that should also react to change.  

Unfortunately the compliance police that run a lot of the financial advice industry don’t understand this fact in regards to the reverence and importance placed on a Statement of Advice. Certain advice dealer groups view Statements of Advice more importantly than they view their clients – because that’s where their risk is – in the documentation.

I doubt Statements of Advice were ever intended to be a ‘sales’ document, but they too often end up as technical sales documents. Too many advisory firms are spending valuable and unpaid time developing their technical WHAT we can do for you Statement of Advice, before they understand the VALUE the client is seeking and WHY they the client might pay the fee.

Using a Statement of Advice as a ‘sales’ or ‘capability’ document is like an airline using a detailed flight plan to advertise their airfares.

The passengers just want to go from A to B and they want to get there safely and on time.

The passengers probably expect their pilots to have a plan for the flight. But, unless they are pilots they probably don’t know about all the information required by airways authorities in a compliant commercial aviation flight plan. Stuff like radio frequencies, GPS co-ordinates, alternates airports, fuel loads, navigation waypoints, route, altitudes amongst other things.

Here’s an alternate approach.

After your first meeting when you believe you can add value to your client. Draft a three or four page Terms of Engagement without any technical advice. Rather, include WHY you are going to work together (i.e. what outcomes are you aiming towards), then articulate in broad terms WHAT you intend to do, and lastly identify your fee for the coming 12 months.

Then, once agreed to proceed, start drafting your Statements of Advice.

Let’s reposition Statements of Advice where they belong – as guiding, auditable and compliant documents for use by the professionals driving the advice rather than the plastic, cookie-cutter developed, risk-minimisation transactional documents primarily written to protect the ‘butt’ of the supplier.

Statements of Advice are as important and crucial for advisers as flight plans are for pilots. But as selling documents they aren’t worth the paper they are written on.

What do you reckon?


About Jim Stackpool

For nearly 30 years Jim has influenced, coached, and consulted to advisory firms across Australia. As founder of Certainty Advice Group, he leads a like-minded team of professional advisory firms seeking to create greater certainty for their clients. As an author, blogger, columnist, and keynote speaker, Jim is regularly called upon for his professional insights into the advice industry. His latest book Seeking Certainty is available now.

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