Fins5510

Reform for statement of advice (SOA)

The reform for Financial Planning involving the issuance of Statement of Advices (SOA) has been greatly debatable. Many believe that the regulation of SOAs is beneficial to not only the client and other users of the information, while others view the regulation to be highly unnecessary and even dubious.

SOA is essentially a report made by an industry expert that outlines the recommendation given and are addressed by its client company. The initial purpose of SOA is to provide the client with the important and relevant information about the advice, so that they can make an informed decision on whether adopt the advice. However, large mount of clients cannot have a clear perspective of the advice due to language problem rather than quality of advice. It must adhere to the standards as provided in the Financial Services Reform Act. A fundamental requirement that the Financial Services Reform Act provides is that an issued SOA must be clear, concise and effective. Another sharp issue is SOA cannot be used independently. Clients have to combine with letter of engagement, PDS and FSG for comprehensive understanding on SOA. It should be develop to a much independent document rather than a auxiliary document.

I believe that the regularisation of SOA – its contents, how it is presented, and even its availability—allows the users of the information to stand on a higher ground in terms of decision-making. The issuance of a regular SOA also allows financial advisers to higher yet more regulated power over their opinion. It because the FOFA Acts entails that advisers be prudent in their use of language in preparing the SOA, the clients are protected from making decisions based on wrong interpretation of information provided using flowery, highfaluting terms written to confuse readers. Therefore, reform on SOA is necessary and I strongly believe that, ultimately, the clients are best benefited by the reform for Financial Planning....