Legislative change not necessary to improve SOAs

On the latest episode of the ifa Show, financial adviser at Complete Wealth Ben Neilson argued that if crafting an SOA was less onerous, advisers would be less vehement about the need to reduce regulations regarding the documentation.

“Our position is that if we can just do that faster, the SOAs aren’t actually that bad if we would just remove most of the crap from it and get to the heart of what it was originally designed to do,” Neilson said.

He added that while the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms will potentially change SOA regulations, advisers don’t need to wait to streamline their processes.

“If they didn’t take as long and they didn’t cost as much, would we care? So, the whole position is that SOAs suck and they’re compliance heavy and there are 100 boring pages and that most of our consumers fall asleep reading them,” he said.

“If they didn’t do all those things, if they were quick and they were sexy and they had fun modelling and they were only 10 pages and it only took you five minutes, what do we care? Because I’m not sure about you, but I don’t trust rules to govern the rest of my professional career.

“I would rather be ahead of that curve because I’m not sure how many pollies are making good financial decisions for our sector, but they haven’t done too well to begin with. So, I’m not sure what stock I put into it.”

Neilson explained that even when regulations around SOAs do change, there will still be a need for some form of documentation like an SOA to allow processes to continue to function efficiently, so there is still value in simplifying the creation of these documents.

“If they’re going to address it and remove some of the regulations, we’re still inevitably going to need some record of what we did and more importantly, what we need our people in our office to do,” he said.

“We still need some record of what we expect the people around us to do so we can help these clients. This still has to be written down. I don’t want to be sitting here debriefing after nine appointments every day going, that guy wants that thing, wants that way.

“A document is still quite easy. And whether it’s in a document or [Ben Marshan] is doing some pretty good work with the video recording, there still has to be some form of record.”

Speaking on his work to help make writing SOAs less onerous, Neilson said that working towards improving the processes of the industry can, in a way, return some control to those in it rather than being at the whim of regulators.

“If we can elevate everybody to the point where they are quite easily servicing 300 clients a year, then we can really introduce some wide-reaching implications. All of a sudden, we are actually acting like professionals. We are creating the world in which we operate, at the moment, we’re merely existing within it,” he said.

While many advisers are concerned about getting ahead of the regulations and trying to reduce the information included in their SOAs because their licensee won’t allow it, Neilson asked a simple question: “Have they asked?

“Have they got a solution where they say, ‘This is what we’re doing and this is what we want to do, and this is the time metrics on it, and this is why we think it’s safer’?” he said.

“Because every time I’ve done this, on four major licensees so far, every single one of them have said, ‘If you do that, if you replace that template with this template, we would have no problems with that’.

“So, have they asked? And then also, what have they done themselves? It’s very easy for me to say it would never work, my licensee wouldn’t say yes, but have you asked?”