Statement of Advice (SOA)

A complete guide to SOA compliance under Australian financial services law

What is a Statement of Advice?

A Statement of Advice (SOA) is a legal document that must be given to a retail client when personal financial advice is provided. Under section 947B of the Corporations Act 2001, the SOA must set out the advice, the basis on which it is given, and prescribed information about fees, commissions, associations, and complaints handling.

What an SOA Must Include

• Client details — personal circumstances, goals, risk profile
• Scope of advice — what is and is not covered
• Recommendations — specific products, amounts, strategies
• Basis for advice — how recommendations align with client circumstances
• Fee disclosure — all fees, commissions, and remuneration
• Conflicts of interest — associations, related parties
• Complaints handling — internal and external dispute resolution
• Cooling-off rights — cancellation window
• Signatures and dates

FOFA and Best Interests Duty (s961B)

The Future of Financial Advice (FOFA) reforms introduced a statutory best interests duty under s961B. Advisers must follow seven safe harbour steps, including identifying the client's circumstances, investigating alternative products, and basing all advice on the client's needs rather than the adviser's interests.

RG 175 — SOA Content Requirements

ASIC's Regulatory Guide 175 (RG 175) sets out the licensing requirements for financial services providers, including detailed guidance on SOA content. It covers fee and commission disclosure, association disclosure, and the requirement for clear, understandable language.

DBFO Reforms

The Delivering Better Financial Outcomes (DBFO) reforms are reshaping how advice is documented, with an increased focus on Client Advice Records (CARs) and clear communication. AdviserCheck's document-type-agnostic architecture checks documents against underlying obligations rather than assuming a fixed SOA template.

The Six Compliance Layers

AdviserCheck analyses SOAs across six layers: completeness, best interests duty (s961B), contradictions, suitability (s961G), language clarity, and fees and conflicts (s961J). Each layer is scored and findings are triple-confirmed by independent AI models.

Purpose and Importance of an SOA

The Statement of Advice serves multiple important purposes. For clients, it is a consumer protection document that records the advice you received, the basis for that advice, and the costs involved. It allows you to make an informed decision about whether to implement the advice and provides a record you can refer to in future. The SOA also documents your right to complain if you are not satisfied with the advice.

For advisers, the SOA is the primary document that demonstrates compliance with their legal obligations, including the best interests duty and appropriate advice duty. A well-prepared SOA protects the adviser in the event of a complaint or regulatory review by showing that the advice was properly considered and documented.

How to Read Your SOA

When reading your SOA, start with the executive summary (if included) to understand the key recommendations. Then read the basis for advice section carefully — this explains why the adviser is recommending each strategy or product. Check that the basis references your specific objectives and circumstances. If the SOA uses general language that does not seem tailored to you, this may indicate inadequate advice.

Pay special attention to the fees and costs section. Understand exactly what you will pay, both upfront and ongoing. Ask yourself whether the expected benefits justify the costs. Review the warnings section to understand the risks and limitations of the advice. If anything is unclear, ask your adviser for explanation.

What to Do After Receiving Your SOA

After receiving your SOA, take time to review it carefully before making any decisions. Compare the recommendations with your stated objectives — does the advice help you achieve your goals? Consider whether the recommendations fit with your overall financial situation, not just the specific area being addressed.

If you decide to implement the advice, your adviser will guide you through the necessary steps, including completing application forms, making contributions, or adjusting existing products. Keep your SOA in a safe place along with your other important financial documents. You may need to refer to it when reviewing your financial plan, preparing your tax return, or if you have questions about the advice in future.

Frequently Asked Questions

How long do I have to keep my SOA?
Keep your SOA for at least 7 years, or longer if it relates to a long-term strategy. You may need to refer to it for tax purposes, Centrelink assessments, or if you later have concerns about the advice. Your adviser is required to keep a copy for at least 7 years.

Can I get a copy of my SOA if I lost the original?
Yes. Your adviser is required to keep a copy of your SOA for at least 7 years and must provide you with a copy on request. There may be a reasonable fee for providing copies of historical documents.

Can my SOA be updated if my circumstances change?
If your circumstances change and the existing advice may no longer be appropriate, you should request updated advice. Your adviser can provide a new SOA or a Record of Advice (ROA) that adjusts the previous recommendations to reflect your new situation.

Does an SOA expire?
An SOA does not have a formal expiry date, but the advice may become outdated if your circumstances, goals, or the economic/regulatory environment change. Most advisers recommend reviewing your financial plan and SOA annually to ensure the advice remains appropriate.