SOAs ‘a complete waste of time’ for clients

On a new episode of the ifa Show podcast, founder and CEO of WOW Women’s Group Tracey Sofra slammed the SOA process as “horrendous”.

“I feel like the client's in the corner and everyone's huddled up worrying about all the stuff. If I could just say this, when I present a plan to a client, they don't really care about the SOA. They just care about what I've got to say.

“And all of this stuff that is meant to help the client and all of this stuff that is meant to put them in a better position… guess what? They’re confused and actually not understanding all the stuff that is required in the SOA.”

Ms Sofra said she believes the truth is that while SOAs are meant to assist clients, they are not helping them nor the adviser.

“It's not better. It's not good. And the client just doesn't understand it,” she explained.

“And we spend hours trying to explain page by page, every single component of the SOA to the client. And they're actually not better off. And it's a complete waste of time.”

Ms Sofra suggested the SOA could instead be a “10-page document” clearly outlining to the client their current financial situation and where they would ideally like to be by a certain period of time.

It comes after the Financial Services Council (FSC) listed simplifying documentation requirements for the advice process as a top policy priority ahead of the federal election in May.

In its report released last week, the FSC stated that SOAs are “driving up the cost” of financial advice and backed calls for the it to be replaced with a letter of advice.

Listen to the full ifa Show with Ms Sofra here.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.