What a Good SOA Looks Like vs a Bad One

Signs of a Good SOA

A well-prepared Statement of Advice should leave you feeling informed and confident about the recommendations. Here is what to look for:

• Personalised content — your name, goals, and financial situation are described accurately and in detail
• Clear reasoning — each recommendation explains why that product or strategy was chosen and what alternatives were considered
• Transparent fees — all costs are presented in a clear table or breakdown, not buried in paragraphs
• Plain language — the document is written so you can understand it, not full of jargon
• Risk disclosure — the risks of each recommendation are explained, including what could go wrong
• Your rights — cooling-off rights, complaints handling, and ongoing service arrangements are clearly outlined

A good SOA also demonstrates compliance with the best interests duty (s961B) by referencing the safe harbour steps. For example, it should state that a reasonable investigation was conducted, that the client's objectives and financial situation were identified, and that the advice is based on the client's relevant circumstances. ASIC's Regulatory Guide 175 sets out the detailed requirements, and a well-prepared SOA will address each one naturally rather than treating them as a checklist.

Warning Signs of a Poor SOA

Some SOAs may not meet the standards required by law. Watch for these red flags:

• Generic or copy-paste text — if the document could apply to anyone, it is probably not tailored to you
• Vague fee disclosure — fees are hard to find, described in percentages only, or use vague terms like "various fees apply"
• Missing reasoning — the document tells you what to do but not why, or the reasoning is shallow
• Jargon-heavy language — if you need a dictionary to understand it, the document is not meeting clear communication standards
• No mention of alternatives — a good SOA shows that other options were considered and explains why the recommended one is best for you
• Pressure to sign quickly — if you feel rushed, take a step back. You have the right to take your time and ask questions

A poor SOA may also fail to address the client's broader long-term interests as required by Standard 6 of the Code of Ethics. For example, it might recommend switching super funds without analysing the loss of insurance benefits, exit fees, or the impact on the client's long-term retirement strategy. ASIC's example SOA (INFO 267) demonstrates how a well-structured document incorporates both the letter of the law and the spirit of good advice.

What the Law Requires

Under the Corporations Act, an SOA must include: your name and contact details, the advice and the basis on which it is given, disclosure of fees in dollar amounts (RG 182), disclosure of any commissions or benefits, and disclosure of any actual or potential conflicts of interest. It must be clear, concise, and effective (section 947B(6)). Advisers must also keep a copy of the SOA for seven years (notional s912G). If your SOA is missing any of these elements, it may not be compliant, and you should raise this with your adviser before proceeding.

How AdviserCheck Can Help

If you are unsure whether your SOA meets the standard, AdviserCheck provides an AI-powered compliance analysis. We check your document against six layers: completeness, best interests duty (s961B), contradictions, suitability (s961G), language clarity, and fees and conflicts. Each layer is scored and findings are triple-confirmed by independent AI models. You can upload your SOA, ROA, or CAR and receive a detailed report identifying potential issues — all without needing to read through 50 pages of fine print yourself.

What to Do If Your SOA Has Red Flags

If your SOA shows signs of poor quality, start by discussing your concerns with your adviser. They may be able to clarify or revise the document. If you are still not satisfied, you can escalate to their licensee or seek an independent compliance check.

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.