The Inside Word with Kate Fellows
We love nothing better than getting together with financial planning experts and talking shop.
In this conversation with Kate Fellows from The Professional Paraplanner, we talk about how to write a great Statement of Advice. Listen out for Kate's top five tips for taking a good Statement of Advice and turn it into a great one.
Check out the video of our interview below:
Tip 1: Make sure the Statement of Advice depicts the financial journey you're taking the client on.
Kate Fellows 11:29
"One of the top tips I have is remembering that the Statement of Advice is the client's financial journey. So I know we tend to look at the Statement of Advice as a compliance document but make sure when it's done that you take a step back and you have a look and think, okay, if the client's reading this, can they see where they are now?
Can they see what they're wanting to achieve and whether there's any limitations around that? How's the advice helping them achieve those goals?
What steps do they actually need to take to implement the advice and how are we going to help them along the way? So it's really that journey, that financial journey of the client, that we want to come out of that document for them to read. I find that paraplanners in particular can get lost in the detail, and they get too focused on the strategy and making sure that that's all right. They forget to take that step back and look at the whole picture of the client. "
Tip 2: Use graphics and visuals to explain complex strategies to clients.
Kate Fellows 12:56
"Make sure that if it is quite a complex set of strategies that we're recommending to a client that we are putting something visual in there. I know that you and I have worked with LucidChart, that's something that I used in my paraplanning business extensively with my team. With LucidChart you can actually share the charts with each other so you're not recreating the wheel every time. But putting something visual in terms of the flow of funds. Again, don't talk about a strategy in isolation, make sure you're showing where the money's coming from, how it's transitioning, what the impact on taxes etc.
That type of information for myself, who's very visual is really important to be adding in to the SOA."
Tip 3: Use document templates to create efficiencies.
Kate Fellows 13:47
"My third tip might raise some conversation. I know there's been conversation about this which is, we need templates. And I know that there has been discussion about not templating. But to me, that's like saying to a business we don't think you should use automated systems and processes. So if you look at it like that, and you take a step back and you think, okay, why do we put systems and processes in place? And templates is really that for the advice process, we do it to create efficiencies and reduce costs, but we also do it to provide consistency to the client, and make sure that we're reducing human error.
Yeah, so templates are really important in such a significant document that has a lot of information in it as long as you customise which is my next tip."
Tip 4: Make sure you customise the document template for each client.
Kate Fellows 13:47
"So it's okay to use a template and you should use a template so that it has all of the correct legislative references that you require, but you must customise it to the client.
And to use an example, dollar cost averaging. Now we can all get information on the internet now, any customer can go and log into MoneySmart and find out what dollar cost averaging is and what the pros and cons of that strategy are. So the value in the advice is not what the strategy is, the value is how it relates to the client, and how that strategy is appropriate in the current market. So talking about why it's appropriate for this client, why it works in a volatile market and that type of information. So we don't, and I'm sure the regulators would agree, I'm going to put my neck out there, we don't mind templates as long as you're customising it to the client."
Tip 5: Make sure the language you use in your Statement of Advice can be understood by the client.
Kate Fellows 16:24
"So my number five was the tone of the essay. And this is the lesson from my research in the UK versus the way we do things here. A lot of SOA templates out there that are being used have a legal tone to them. I just don't think that that's how we should be speaking to our clients. So we need to think about how we're communicating not just as the advisor over the desk with their client, but in the written form as well because how much did they retain of that appointment where they're sitting face to face? I'm sure there's statistics around that, but the one thing they have that they take away is that document. So thinking about how we communicate, and the tone that we use is really important as well."
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