How to deliver compliant video SOAs

In a recent Implemented Portfolios webinar, self-licensed adviser James Wortley of Queensland-based practice Enlightened Financial Solutions shared his experience of developing compliance-friendly video SOAs.

Mr Wortley said the firm had focused on client experience and making advice as concise as possible in developing their video format, which had involved scoping individual pieces of advice rather than taking a holistic approach.

“For the clients to understand the advice it’s got to be simple and concise, so the way we came up with this is about scoped advice,” he said.

“We don’t believe holistic advice is the best way going forward - instead of presenting the advice all in one hit, we’re going to present it potentially four or five [pieces of advice] at a time.”

Mr Wortley added that the firm had gone through a comprehensive process with legal consultants to ensure they were delivering video SOAs in a compliant way, which had involved a number of arguments with auditors despite the fact that ASIC guidance permitted advice to be delivered digitally.

“Under the Corporations Act, an SOA can be given by an adviser in either printed or electronic form, and this has been interpreted by ASIC to mean that SOAs can incorporate a range of digital features such as video, interactive menus, Q&A’s and gamification,” he said.

“We’ve had a couple of audits and they’re very comfortable, but the issue we had is trying to find auditors that will accept what we’re doing. We have had accountants that say ‘you can’t do this, you can’t do that’, and we’re just going ‘that’s bullshit’.

“The legislation says we can do this by this manner, and we’re happy to be pioneers but we had to have the confidence in ourselves to be able to get through that process.”

Mr Wortley said clients received a package of information via Dropbox containing additional details about the products being recommended, meaning the video section of the SOA was able to be stripped to a “concise” presentation of several minutes.

“All our advisers will review our videos to make sure we’re getting a good understanding of how the other advisers are doing it. Previously our video advice was going from 15-20 minutes so it didn’t work and became too complex - we were going into too much detail,” he said.

“The client is going to get this Dropbox link, so they’re going into all the other details and then there will be a catch-up to go through any queries they do have. It will usually be a phone call to say ‘I’m happy with that’, then we do a Docusign link and the client doesn’t need to come into the office, so there’s some good efficiency savings in there as well.”