What if SOAs became a bit more visual or auditory, and a lot less text heavy? A new interactive guide from the FPA will help planners improve the SOA advice experience for clients

It’s a cliché to say ‘A picture is worth a thousand words’, but images and sounds have real power. Just ask the advertising industry about the best way to grab your audience. If you want to really communicate with someone, it needs to be a multi-sensory experience.

And yet, when it comes to providing something as important as financial advice to a client, the advice industry remains locked into weighty paper-based documents nobody wants to lift, let alone read.

So what if the SOA became a bit more visual or auditory, and a lot less text dense? Is it too big a leap, or just a sensible step given the way new technologies are being embraced by other industries?

Reimagining the SOA through technology

These are the questions the FPA’s Future of the Statement of Advice Working Group has been exploring in the FPA’s new resource, The Future of the SOA: An Interactive Guide. This exciting new tool is designed to help financial planning businesses harness the benefits of multimedia technologies, after years of both financial planners and consumers struggling with lengthy, paper-based advice documents.

The working group drew on the expertise of FPA members, regulators, compliance experts, lawyers, licensees, content and digital media specialists, and advice technology experts in creating the interactive guide.

As Fraser Jack, head of client partnerships at Advice Intelligence, and a member of the working group, explains: “The FPA’s new guide is all about setting out what’s possible in the new digital world in terms of an SOA. It’s also about using our knowledge of how the brain works and utilise that to help increase client understanding.”

The new guide also embraces innovation and highlights the benefits technology can bring to a planning business, explains the managing director of CoreData, Jason Andriessen CFP^®.

“It is a resource centre that creates a platform for planners to change their thinking about how they work and deal with clients and where their value rests,” he says.

Embracing new ways to deliver advice

A key driver of the move to embrace digital SOAs is the recognition that technology can deliver advice in a smarter and more efficient way, according to FPA CEO, Dante De Gori CFP^®.

 “The future of financial advice delivery will be one where every client is given their own individual, tailored experience based on their unique communication and behavioural preferences,” he says.

 “It will harness the appropriate digital technology solutions to make the experience a meaningful and more engaging one for the client. It’s about prioritising what’s best for the client, rather than simply ticking compliance and legal requirements.”

 The interactive guide represents an important thought leadership resource to help the advice industry meet this challenge. It also provides practical information about the role technology can play in streamlining and modernising advice delivery.

“This is a conversation that has to be had, as the industry is facing lots of headwinds and the FPA has stepped in to provide leadership in this area,” Jason explains.

Unlike other industries that readily incorporate new technology to improve efficiency, customer engagement and profitability, the heavily regulated nature of the advice industry discourages this shift. 

“The unfortunate thing is planners and other industry players have not been rewarded for innovation and trying new things. Post the Royal Commission, it has been difficult to innovate,” he says.

Clients’ expectations have changed 

Jason believes there has been a significant shift in the way clients view the advice process.

“The Royal Commission also changed expectations. People want to be involved, have their ideas distilled and to make decisions with assistance from a planner. They want to co-create their financial plan,” he says.

The advice profession has also fallen behind in embracing new technology.

“Advice clients and the community more broadly have changed how they buy. How they interact with professionals is also different. Clients live their life online now and they expect to be served that way,” Jason adds.

Fraser agrees: “Consumer behaviour has come a long way, but financial planners have not moved, so there is a big technological gap. We need to catch up to our clients.”

 This technology gap also exists within the profession itself and may be key to the survival for some practices.

 “Despite concerns about robo-advice, technology will not replace planners, but planners adopting and using technology will replace those who don’t,” he says.

Drowning in a sea of paper

 Although many planners find the idea of a digital SOA confronting, surprisingly, there is nothing in the regulations actually requiring an SOA to be paper-based.

The Corporations Act is silent when it comes to the format of an SOA.

“It doesn’t say anywhere it must be a written document. It’s known as a statement of advice, so everyone assumes it has to be a document, but it doesn’t need to be,” explains Fraser.

“You can provide information to people without it being in a document – they can watch, read or listen. Planners are free to match how they present SOA information to the way the client prefers to consume it. For example, a client could choose to listen to their SOA while walking their dog.”

Numerous consumer behavioural financial reports identify that long-form, text-heavy documents do not match the way a large majority of people best digest and understand complex information, explains Ben Marshan CFP^®, FPA Head of Policy and Standards.

“Research shows only 8 per cent of consumers have a preference for the written, paper-based documents we produce today. The other 92 per cent of clients learn best by watching, listening, engaging and testing to come to their understanding of their financial plan.” 

Fraser agrees: “It should be about how the client will best understand the information, not just how it is disclosed to them.”

Using technology to create the future

Although it’s easy to ‘talk the talk’, the FPA’s new guide actually ‘walks the walk’ by demonstrating how new communication technologies can educate and inform. 

“The guide isn’t paper-based. It has multiple components and they can be accessed via video, audio or text, so they allow the planner to consume the information the way they want,” explains Jason.

The interactive guide steps planners through the evolution of the SOA and considers the future potential of technologies, such as mobile apps and augmented reality. 

It also showcases several examples of digital SOAs created by technology providers working in the space to demonstrate what is currently possible in terms of advice delivery.

“The material in the guide is designed to address the mind shift necessary for planners to use digital technologies to create an SOA. It’s designed to be thought-provoking and to encourage planners to go forth and explore,” says Fraser.

Jason agrees: “It’s a great starting place for the really important conversations the advice industry needs to have.” 

Business benefits from digital SOAs 

From a business perspective, the new guide highlights how improved profitability can flow from more efficient advice delivery.

“With a digital SOA, you will achieve a lower cost of production, which will create greater efficiencies in an advice business,” Jason says.

“The current way of working is just too inefficient and the cost of advice is increasing. That means planners need to get rid of duplication, improve their efficiency and reduce their costs.”

Embracing technology can also improve client engagement and achieve better client outcomes. “A paper-based SOA is the culmination of the advice process. It’s different with a digital SOA. It provides an opportunity for the SOA to become integral to the process,” he says.

There are also compliance benefits with the digital approach, as it improves transparency in the advice process. 

“It makes it easier to meet the FASEA ethical standards, as you are bringing the client along with you. Not in terms of disclosure, but by increasing the client’s responsibility for, and understanding of, the advice provided,” Jason explains.

“A digital SOA can also help prove your clients understand, engage and accept your recommendations. This leads to better decision-making.” 

A digital statement also responds to growing client expectations of more participation in the decision process.

“When we tested sample digital SOAs with existing advice clients, they saw it as a living document they could co-create with their planner. This matched their desire for involvement in the process. If planners don’t change the way they do business to meet this demand, their future will be very difficult,” he says.

Finding the tools to change

In addition to the new interactive guide, the FPA has a suite of complementary resources. These tools are designed to support practices transitioning into a more efficient and client-friendly tech-enabled business model.

 Available by clicking here, the tools include a Technology Assessment Template, FPA Fintech Buyers Guide and Checklist and the Financial Planning Process Mapping Tool. An overview report, Mapping Fintech to The Financial Planning Process, helps with identifying and matching fintech solutions to the financial planning advice process.

 The FPA website also offers a range of detailed articles on issues, such as the fintech threat to advisers, the fintech universe and the quest for efficiency, meaning, relevance and value.

 Jason believes the new interactive guide builds on these valuable foundation resources. “These tools are aimed at improving your practice management for greater efficiency and helping to future-proof your business.”

Despite the challenges faces planning practices, he remains optimistic about the future of the profession.

 “The demand for financial planning services is higher than ever and the future opportunities are extraordinary, as client demand for advice is very strong.”

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 Tips for using the new FPA interactive guide 

Visit the website and check out the topics covered in the 17 sections.

Work your way through the guide in an order that makes sense to you.

Select from the text, audio or video options in each section.

Put on headphones to fully experience video and audio content.

Work your way through all the buttons to experience drilling down into specific topics and switching between areas.

Think about how watching, listening and reading content works as an interactive learning tool.

Open your mind to using visual materials to improve client understanding.

Get excited about the possibilities presented by new technologies.

Consider how new technology could be incorporated into your practice.

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SOA: an interactive guide

 Content in the new guide can be accessed using text, video or audio. The guide includes:

1. Introduction.

2. Podcast – Interview on Goals Based Advice podcast discussing how you can make the move away from traditional paper-based SOAs.

3. Key objectives.

4. Evolution of the SOA.

5. What are the next stages in our evolution?

6. What happens when the technology evolves?

7. Aims of the example interactive SOA.

8. Design and layout of the interactive SOA.

9. The four main internal learning systems.

10. How can we help our clients digest information from an SOA? Part 1.

11. How can we help our clients digest information from an SOA? Part 2.

12. Personal advice, general strategy information and general product information.

13. Will my compliance team come on board?

14. The Australian Compliance Standard of an SOA.

15. Calling on the regulators.

16. Initial client feedback.

17. Next steps – Six videos recreating ASIC RG90 example SOA.