Change or be changed: The challenge for advice

The secret of change is to focus all your energy not on fighting the old, but on building the new.
— Dan Millman, "Way of the Peaceful Warrior"

Licensees, leadership and courage

As an industry, we are facing a challenging and momentous year.

While the industry worries about the implications of the Royal Commission’s final report, the ASIC levy is presenting yet another challenge for licensees struggling with the assault on their financial models. Advisers, even those who previously rested secure in an institutional embrace, are now considering the daunting reality of self-reliance. As margins decline and costs increase, and as the looming threat of FASEA becomes a practical and inevitable consideration for licensees, the enormity of the challenge is depressing many.

But not all.

One of the best indicators of the year ahead is the optimism and pragmatism with which many advisers and licensees are confronting the future.

Here’s to the crazy ones ... because the people that are crazy enough to think that they can change the world are the ones that do.
— Steve Jobs
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In the past months we’ve talked strategies with CEO’s driving change within their own licensees undaunted by the complaints of reactionary advisers clinging to the idea of conflicted remuneration, the myth of ‘dealer margins’ and the fantasy of continued subsidisation of their ‘independent’ practices.

We wish them well.

Change is inevitable. The reality is that it’s better to change than to be changed.

In an industry that will be reformed, the secret to sustainability is to have a vision of the future and the courage and conviction to achieve it.

If you’re with a licensee that’s firmly rooted in the past, take the opportunity now to join or start a licensee that’s focussed on the future.

If you’re unsure where they are, we’re happy to point you in the right direction.

If your time to you
Is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’.
— Bob Dylan, The Times They Are A-Changin'

Advice about advice (documents)

It’s not all about structural change.

Since November 2018, we’ve seen an increasing number of advisers (and newly licensed business) cast off the burden of their institutional SOA templates to create documents that are readable, friendly and “clear, concise and effective”.

Traditionally, changes like this were relegated to the “too-hard basket” by licensees; after all, why would they pursue clarity at the expense of risk mitigation?

Whether it’s a result of the Royal Commission, or the simple realisation that promoting disclosure over engagement is uncommercial, ineffective and self-defeating, change is happening.

Whatever its genesis, we gleefully anticipate the death of the dense, disengaging and boilerplate advice documents that have frustrated advisers and clients since 2004.


So how are they doing this?

It’s less revolutionary than you might expect. In an approach that echoes Justice Hayne’s advice to an industry mired in conflicts and complexity, they’re simply deciding to follow the law.

The law, and ASIC policy, provides participants with more flexibility and guidance than most participants are comfortable acknowledging.

The law doesn’t insist that your SoA is an interminable and uninspiring collection of disclosures, disclaimers and jargonistic drivel. It requires your advice to be ‘clear, concise and effective’. It doesn’t have to address every theoretical risk and potential liability. It should instead be accessible and contain “the level of detail about a matter that … a person would reasonably require for the purpose of deciding whether to act on the advice as a retail client” and be “worded and presented in a clear, concise and effective manner”.

Clear. Concise. Effective.

Take a moment to review your last SOA and consider whether, and to what extent, you’re meeting this basic test.

Look for the repetition and eliminate anything that doesn’t improve your clients’ understanding of your advice, its basis, its costs and consequences.

If you are rebuilding your template, start with the eight core SoA elements required by s947B (SoA from Licensee), 947C (SoA from Authorised Representative) and 947D (replacement product advice) are: 

a. a statement setting out the advice (see s947B(2)(a) and 947C(2)(a));

b. information about the basis on which the advice is or was given (see s947B(2)(b) and 947C(2)(b));

c. a statement setting out the name and contact details of the providing entity and, where relevant, the authorising AFS licensee (see s947B(2)(c) and 947C(2)(c)–(d));

d. information about remuneration, commissions and other benefits capable of influencing the providing entity in providing the advice (see s947B(2)(d) and 947C(2)(e));

e. information about any other interests, associations or relationships that might be expected to be or have been capable of influencing the providing entity in providing the advice (see s947B(2)(e) and 947C(2)(f));

f. where the personal advice is based on incomplete or inaccurate information, a statement setting out the warning required by s961H (see s947B(2)(f)) and 947C(2)(g)); and

g. where the personal advice recommends the replacement of one financial product with another financial product (also known as ‘switching advice’), the additional information required by s947D.

If you need assistance, or even just an opinion, on your SoA template contact us at

Paraplanning and beyond

In late 2018, we launched our para-planning service.

The initial feedback has been exceptionally positive and we’d encourage you to consider how our team can help improve your own efficiency and profitability.

It is great to work with such a professional and diligent team and look forward to working together going forward.
— Gale Lefroy, Wealth Plus Solutions

In addition to SoA production, our para-planning team can assist with your remediation project and, if you’ve transformed your SoA, they can code your template for your preferred advice system.

If you’d like further information, email

Accuracy over speed

Our team is wading through the BankingRC final report, and the Government’s response.

It’s too important to rush but we’re preparing our analysis of the key recommendations and their likely impact on advisers and the advice profession.

Subscribe to this Newsletter to receive our research and analysis.