How to Train Paraplanners on s961B Compliance Standards

Understanding s961B Best Interests Duty

Section 961B of the Corporations Act requires advisers to act in the best interests of their clients when providing personal advice. Paraplanners play a critical role in documenting how this duty has been satisfied in the Statement of Advice. Training paraplanners on s961B is essential for producing compliant advice documents.

Key Training Areas

Paraplanner training should cover the safe harbour steps under s961B, including identifying the client's circumstances, identifying the subject matter of the advice, analysing the client's existing financial situation, assessing the consequences of the advice, investigating alternative products, and basing all recommendations on the client's needs.

Documenting Compliance

Paraplanners must know how to document each safe harbour step clearly in the SOA. This includes showing that alternatives were considered and explaining why the recommended option is the most appropriate for the client. Training should focus on practical examples and common compliance gaps found in ASIC reviews.

Quality Assurance

A robust quality assurance process helps ensure that SOAs consistently meet s961B standards. Paraplanners should be trained to self-review their work against a compliance checklist before the document reaches the adviser or licensee for final approval. Regular file reviews and feedback sessions help maintain quality.

What This Means for Consumers

When paraplanners are well-trained on s961B, the SOA you receive is more likely to clearly show that the advice is based on your best interests. If the document lacks this reasoning, it may indicate a gap in training or compliance processes at the licensee level.

Understanding the 7-Step Best Interests Duty

Section 961B of the Corporations Act requires advisers to follow a 7-step process to ensure advice is in the client's best interests. Paraplanners must understand each step and how to document compliance in the SOA. The steps are: (1) identify the client's objectives, financial situation, and needs; (2) identify the subject matter of the advice; (3) identify the client's relevant circumstances; (4) make reasonable inquiries to obtain complete and accurate information; (5) assess whether the adviser has the expertise to provide the advice; (6) consider a range of products and strategies; and (7) determine whether the recommended product or strategy is appropriate.

Paraplanner training should focus on how to document each step in the SOA or CAR. For example, step 6 (consider a range of products) requires the SOA to show that alternative products were considered and explain why the recommended product was selected over alternatives. Simply stating that alternatives were considered is not sufficient — the document must show which alternatives were evaluated and the basis for the recommendation.

Documenting Compliance in the SOA

Paraplanners should be trained to produce SOAs that clearly demonstrate compliance with each step of s961B. The SOA should include: a clear description of the client's objectives, financial situation, and needs (step 1); identification of the advice subject matter and scope (step 2); identification of relevant client circumstances (step 3); evidence that reasonable inquiries were made (step 4); confirmation of adviser expertise (step 5); a product comparison table or rationale (step 6); and a clear statement of why the recommended strategy or product is appropriate (step 7).

The best SOAs weave the s961B compliance narrative through the document rather than treating it as a checklist. The reader (including an ASIC reviewer) should be able to follow the logic from client circumstances through product research to the final recommendation. Paraplanners should avoid boilerplate language and ensure each SOA genuinely reflects the specific advice process for that client.

Training Methods and Assessment

Effective s961B training for paraplanners combines theoretical knowledge with practical application. Use case studies based on real (de-identified) advice scenarios to teach paraplanners how to apply the 7-step process. Include examples of both compliant and non-compliant SOAs so paraplanners can identify good and bad practices. Role-playing exercises where paraplanners explain the s961B compliance to a "client" can also be effective.

Assessment should include: a written test on s961B requirements, practical assessment of SOA drafting against s961B standards, and ongoing monitoring of SOA quality through file reviews. Paraplanners who consistently fail to demonstrate s961B compliance should receive additional training and mentoring. Licensees should maintain training records for all paraplanners.

Frequently Asked Questions

Do paraplanners need to understand all 7 steps of s961B?
Yes. While the adviser is ultimately responsible for compliance, paraplanners draft the documents that demonstrate compliance. A paraplanner who does not understand s961B cannot produce an SOA that properly documents the adviser's compliance with each step.

How often should s961B training be refreshed?
Annual refresher training is recommended, plus additional training when there are significant regulatory changes or enforcement actions that clarify the requirements. New paraplanners should receive comprehensive s961B training as part of their induction.

What is the most common s961B documentation failure?
The most common failure is inadequate documentation of step 6 — considering a range of products. SOAs often claim alternatives were considered without showing which alternatives were evaluated or why they were rejected. A product comparison table or detailed rationale is essential for compliance.

Can template language satisfy s961B documentation requirements?
Template language can provide a framework, but each SOA must be tailored to the specific client situation. Generic statements that do not reference the client's actual circumstances are unlikely to satisfy ASIC requirements. Training should emphasise the need for individualisation.

Regulatory Context

Consumers evaluating advice documents benefit from knowing the recent timeline. Since FOFA took effect in 2013, advisers have owed a best interests duty and been barred from conflicted remuneration. The DBFO reforms, phased through 2024-25, removed the Fee Disclosure Statement and simplified ongoing fee consents while clarifying how advice fees can be deducted from super. Further change is queued: the Quality of Advice Review’s proposals for simpler SOAs and a new adviser class were progressing through draft Tranche 2 legislation as of March 2025.