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.


UGC General Advice Past Performance Warning

Recent stories

Understanding the Sharemarket: A Beginner’s Guide

Investing in the sharemarket can be a powerful way to grow your wealth over time. Whether you’re new to investing…

Read more

Franked Dividends vs Unfranked Dividends

When it comes to investing in the stock market, understanding the nuances of dividend payments is crucial. One of the…

Read more

UGC Monthly Market Update | May 2024

Join UGC’s Head of Research / Co-Portfolio Manager, Huw Davies, as he takes a deep dive into the latest financial…

Read more

If aged care advice is confusing – get advice

Many people think they can’t afford to get aged care advice, but the reality is you probably can’t afford not…

Read more

Mastering the Tax Game: Boost Your Wealth & Trim Your Tax

As the end of the financial year approaches, it’s the perfect time to refine your tax strategies and maximise your…

Read more