'One-in-a-generation opportunity' to reimagine the SOA

As advisers return to the office for the new year, Adviser Ratings is urging them to consider the opportunities for growth and betterment across their practices and processes in 2025, particularly in relation to statements of advice (SOAs).

“The confluence of regulatory reform, technological advancement, and evolving client expectations presents a unique opportunity for practices to reimagine every aspect of their business. Those who adapt to change and actively embrace it will create sustainable competitive advantages in this dynamic environment,” Adviser Ratings said.

With the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms hopefully on the horizon for 2025, Adviser Ratings said there is ample opportunity for advisers to reimagine their documentation process.

“At the end of 2024, the government confirmed that statements of advice will be replaced with more flexible, client-centric advice records, marking perhaps the most significant opportunity to reengineer your client's experience,” the firm said.

Adviser Ratings managing director Angus Woods added: "This is a once-in-a-generation opportunity to rebuild advice documentation from scratch.

“The practices that take time now to design their ideal client experience, rather than simply trying to replicate current SOAs in a different format, will be best positioned for growth in 2025.”

Statements of advice (SOAs) have long been a pain point for advisers as they put stress on advisers’ already very limited time while providing little to no real value for clients.

Highlighting this, Adviser Ratings noted that only one in seven advised clients say they read their SOA while advisers are spending an excess of 25 hours, as well as thousands of dollars, to create these documents.

“This inefficiency represents a massive opportunity for practices willing to reimagine their approach to advice delivery,” the firm said.

However, even with no timeline for when these reforms may come into play, Adviser Ratings suggested that there is room for change within the current regulatory framework, with some advisers already utilising video record of advice discussions, AI-powered summaries, and interactive modelling tools, as a means of streamlining their processes.

While SOAs are one front on which advisers can rethink their business processes in 2025, the firm said that advisers have myriad opportunities to do so across the board.

“Success will require more than incremental improvements to existing processes. The most successful practices will be those that fundamentally rethink how they operate, creating more efficient, client-centric, and profitable businesses,” the Adviser Ratings said.