What is a Statement of Advice?

Navigating the world of financial advice can often seem daunting, especially when faced with various documents and terminologies. One such crucial document is the Statement of Advice. But what exactly is it, and why is it so important? In this article, we’ll delve into the essentials of a Statement of Advice, breaking down its components and highlighting its significance in the financial planning process.

What is a Statement of Advice?

Any financial advice, whether simple or complicated, must be provided to a client in a written document known as a Statement of Advice. This document is crucial because it contains the following disclosures:

  • A comprehensive overview of a client’s goals and objectives, which often determines the scope of the advice given.
  • Complete details of a client’s financial situation, which are used to ascertain which recommendations and strategies are suitable.
  • The recommendations and strategies based on the client’s objectives and financial situation. Any recommendation should also illustrate how the advice given would enhance a client’s financial situation, such as increasing their retirement savings or ensuring the family’s financial protection in case of unforeseen events.
  • Any pertinent warnings, for instance, potential risks associated with investing or any gaps in insurance coverage.
  • Charts and projections, such as potential super balance at retirement and the duration your funds might last post-retirement.
  • Details of any products being recommended, along with those being replaced, for comparison purposes.

Your financial adviser will always present the Statement of Advice to you and address any questions you might have regarding the proposed strategies. The subsequent steps involve implementing the given recommendations, and your adviser will guide you throughout this journey.


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