What is a Statement of Advice, and what should be in it?

A Statement of Advice (SoA) is the document an Australian financial adviser gives you when they provide personal advice. It sets out your situation and goals, what the adviser recommends and why, the risks, and every fee and cost involved. You read it before anything is put in place.

Why it exists

Personal financial advice in Australia is regulated. When an adviser takes your circumstances into account and recommends a course of action, the law requires them to put that advice in writing. The SoA is your record of what was recommended and the basis for it.

What it should contain

• Your situation and goals. What the adviser understood about you. Check it carefully, because the advice depends on it.
• The scope. What the advice covers, and just as importantly what it doesn’t.
• The recommendations. What to do, in what order.
• The reasons. Why each recommendation suits you, compared with the alternatives.
• The risks. What could go wrong and how it is managed.
• The costs. The adviser’s fees and any product costs, in dollars.
• Any conflicts. Commissions or other benefits the adviser or licensee may receive.

What to check before you sign

Does it describe your life accurately? Do you understand each recommendation well enough to explain it to someone else? Are the costs clear? A good adviser will walk you through it and welcome your questions.

At Channel Wealth

We walk every client through their SoA in person or by video, and nothing is implemented until you are comfortable. See how it works and how we charge.

This article is general information only and does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for you, and seek personal advice, before acting on it.