Since the release of Michelle Levy’s Quality of Advice Review many alternatives to the current Statement of Advice have been floated. The Government has indicated that the Statement of Advice should be replaced with an Advice Record that is fit for purpose.
So far, the government has given no indication as to the format of the Advice Record. It has not set guidelines as to who may provide this Advice Record. However, there are very clear messages coming from Stephen Jones, Assistant Treasurer, that he would like to see a greater role for Superannuation Funds in providing advice.
The purpose of the QAR was to develop low-cost advice that would suit the needs of everyday Australians, who are currently excluded from financial advice due to the high costs.
There have been many suggestions put forward about the delivery of advice. One suggestion that has been floated is the use of Video SOAs. The IFA published the article Video SOAs are on the horizon, but how can advisers implement them.
The article states:
“What’s critical is that the client clearly understands what the advice is, why it been given, how much it is going to cost. There are a few key things that we need to ensure that the client understands to give informed consent, but the best person to make that call is the adviser.
The article offers one solution as a Video recording made as the adviser delivers the advice, allowing the client and the adviser to interact during the delivery of the advice process. This methodology may be sound from the adviser’s perspective. It would clearly show the advice given. I have concerns about the long-term value to the client. With Cyber security of such a high concern, I would be worried if clients can download the video to their personal computers.
Adele Martin, the founder of My Money Buddy and The Savings Squad podcast, told the IFA in June that the SOA’s don’t need to be more than two pages long. She is promoting Canva as the instrument for delivery.
Reading the comments on the article, this option does not appear to have been well-received by financial advisers.
Financial Mappers Pro (Plencore Wealth Ltd) does offer a solution that embraces the concept of the Advice Document being more readily accepted by the client. The secret is delivering the information in small segments that the client can review after the meeting.
During the meeting, the advice is delivered using the Client Review Gateway. Examples of the SOA and other reports are available on Financial Mappers/Digital Statement of Advice. The report is delivered with text on the left side of the screen, with the right providing graphs that the client can scroll over and review the results on a year-by-year basis. Instead of reading the text section, the client can click the icon to listen to the text. I suppose this is like a video, except the client can take their time and skip to the contents to access the data they want to read or hear. The Client Review Gateway allows the adviser to upload supporting documents. This could include:
- Financial Services Guide
- Product Disclosure Documents
- PDF of the SOA or other Document
- Supplementary reports such as a Comparison of Two Plans, Debt Management Report or Insurance Needs Evaluation
The software comes pre-loaded with financial literacy from MoneySmart in both PFD and video format. The adviser can also upload their own content. For example, they may have customised videos about savings and debt management that can be available from the Client Review Gateway. Both the client and the adviser can ask and answer questions using the Q&A feature.
All this is provided within the Connect Client Portal so that there is no sensitive information passed through email.
In response to the QAR, Plencore Wealth Ltd, is developing a new product called Advice Online. This is designed to deliver low-cost advice to the mass market.
It is expected the advice can be delivered in less than an hour.
The client will complete the Fact Find, from where the information is automatically pre-filled into a plan. After reviewing the client’s objectives for the advice, the adviser will optimize the plan, and write the advice in seven panels with the remainder of the Advice Document being automatically generated by Advice Online. The client has access to the plan and can review it in detail without being able to amend the plan. They can independently generate short targeted reports such as a Debt Management Report.
While there has been much written about AI to generate advice documents, Advice Online allows the advice to be customised to the client’s current financial situation and future needs as set out in the Fact Find. This is a better alternative to AI.
I believe that Advice Online is a very sustainable process that delivers low-cost advice to those not being catered for at a price the client can afford, but a price that pays the adviser adequate compensation for their time and expertise.
Glenis Phillips SF FIN – Designer of Financial Mappers and Advice Online