SOAs undergo streamlining
Rob Thomas
In response to the Financial Planning Association’s (FPA) call for shorter Statements of Advice (SOAs), AXA Australia has introduced a suite of tools that have reduced their SOA production time by 50 per cent.
According to the FPA, the prescriptive nature of the Financial Services Reform compliance regime has significantly increased the cost of providing documents to clients, making advice in Australia out of reach for many people.
AXA national manager of technical and research Robert Thomas said streamlining SOAs will go a long way in addressing this issue.
“By reducing the time it takes to produce a SOA the adviser can be more productive and focus on more important things, like meeting with clients, rather than the more menial tasks. It is also possible to have the time and money saved passed onto the consumer,” Thomas said.
According to Thomas, AXA conducted trials to test the new system and found it cut down the time it took advisers to write SOAs by 50 per cent, and also reduced the document itself by 75 per cent.
“We have a tool we called Draft that contains over 900 different templates that can be used to create a SOA. You can think of it as a jigsaw, finding the right pieces to fit together. And we’ve developed a very easy to use system much like a Microsoft Wizard, so it will ask you a series of questions eliminating irrelevant subjects as you go along,” he said.
AXA has also introduced a risk advice tool that incorporates a fact-finder with an insurance calculator.
“On average, a client who needs just one type of insurance takes just 15 minutes. A couple who need a combination of insurance products takes just 30 minutes.”
Thomas said the most important change needed is to make SOAs easier to understand, so consumers become more willing to buy financial advice.
“We need to make financial advice more accessible. The FPA has said that only one in five Australians actually have a financial adviser. This of course adds to the overall underinsurance problem in Australia,” he said.
“So by streamlining the SOA the customer can better understand what they’re buying.”
AUTHOR
Mike Taylor
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
