The Client's Checklist: Evaluating Your Statement of Advice

Personal Details

Are your name, date of birth, and contact information correct? Does the SOA accurately reflect your financial situation, goals, and risk tolerance as you discussed with your adviser? Mistakes in this section can lead to advice that is not suited to you.

Best Interests Duty

Did your adviser explain why each recommended product or strategy was chosen over other options? Australian law requires advisers to act in your best interests (s961B). If the SOA does not show that alternatives were considered, this may be a gap in compliance.

Fee Disclosure

Are all fees clearly listed, including upfront costs, ongoing fees, commissions, and any exit fees? Is there a fee table that makes the total cost easy to understand? If fees are buried in fine print or missing altogether, ask for clarification before signing.

Appropriate Advice

Do the recommendations match your stated goals and personal circumstances? The advice must be appropriate for you (s961G). If the recommendations seem generic or do not align with what you discussed, this is a concern.

Language and Clarity

Is the document written in plain language that you can follow? If it is full of jargon, technical terms without explanation, or boilerplate text that could apply to anyone, the document may not meet the standard for clear communication.

Next Steps

If you find issues or have questions, raise them with your adviser before signing. You have cooling-off rights on most products. For an independent second opinion, consider using a compliance checking tool to analyse your SOA against Australian regulations.

What to Check First in Your SOA

When you receive your Statement of Advice, start by checking the basics. Does the SOA clearly state your name and the date of the advice? Does it identify your adviser and their licensee? Does it specify whether the advice is general or personal? Does it clearly set out your objectives and financial situation as you described them to your adviser? If any of this information is incorrect, the SOA may be based on incorrect information.

Next, check the recommendations section. Are the recommendations clearly stated in plain language? Do you understand what each recommendation involves? Does each recommendation specify which product, strategy, or action is being recommended? If you cannot understand what the adviser is recommending, ask for clarification before proceeding.

Checking Fees and Costs

The fee section of your SOA should clearly disclose all costs associated with the advice. Check that: all upfront fees are stated in dollar amounts, ongoing fees are stated annually and monthly, any product fees (such as super fund administration fees or insurance premiums) are disclosed, and any indirect costs (such as investment management fees within super funds) are included.

Compare the total costs with the potential benefits of the advice. The SOA should include a cost-benefit analysis showing how the recommended strategy is expected to benefit you after accounting for all costs. If the fees seem high relative to your investment amount, ask your adviser to explain the value proposition and whether lower-cost alternatives were considered.

Evaluating Risk and Suitability

Your SOA should address the risks associated with the recommendations. Check that: the risk level of recommended investments matches your stated risk tolerance, the SOA includes appropriate risk warnings, the recommendations consider your time horizon, and the SOA addresses what happens if market conditions change.

Also check whether the SOA considered alternatives to the recommended strategy. A compliant SOA should show that the adviser evaluated other options and explain why the recommended approach is preferred. If the SOA does not mention alternatives or only discusses one option, ask your adviser what other strategies were considered and why they were not recommended.

Frequently Asked Questions

Should I implement the advice immediately or take time to consider?
Take time to consider. Your adviser should encourage you to review the SOA carefully before making any decisions. You are not obligated to implement the advice, and you should not feel pressured to make quick decisions. Most products have a cooling-off period if you change your mind.

What if I disagree with the recommendations in my SOA?
Discuss your concerns with your adviser. They may be able to adjust the recommendations based on your feedback. If you cannot reach agreement, you are not obligated to implement the advice. You may wish to seek a second opinion from another adviser.

Can I get my SOA explained to me in person or over the phone?
Yes. Your adviser should be willing to explain any part of the SOA that you do not understand. Many advisers schedule a separate meeting to discuss the SOA after the client has had time to review it. Do not hesitate to ask questions.

What if my SOA does not mention products I already hold?
Your SOA should reference your existing products, particularly if the advice involves replacing or retaining them. If the SOA does not mention existing products, ask your adviser whether they considered your current arrangements as part of the advice process.

AFCA Complaints — What to Know

If you have a dispute with your financial adviser, AFCA provides free independent dispute resolution. In 2023-24, AFCA received 3,559 complaints about investments and advice. The most common issues were inappropriate advice, fees disputes, and poor disclosure. AFCA can award compensation of up to $1 million (with a $5.36 million cap for superannuation complaints). Complaints must be lodged within 6 years of the issue arising.

What Financial Advice Typically Costs

What does advice cost in practice? The typical ongoing fee sits around $4,700–$4,800 a year — a figure that has climbed 67% in five years, though annual growth has cooled to roughly 4%. Starting out, expect an initial Statement of Advice to be priced between $2,000 and $3,500, with specialist hourly rates anywhere from $300 to $600. Since FOFA banned commissions on investment advice, fee-for-service billing has become the norm.