What is a Statement of Advice (SOA)?
A Statement of Advice (SOA) is a formal financial advice document provided in Australia when a licensed financial adviser gives personal financial advice to a retail client. It is required under the Corporations Act 2001 and must explain the advice being provided, the basis for the recommendations, the costs involved, and any conflicts of interest.
The purpose of an SOA is to help consumers understand what is being recommended and why, so they can decide whether to proceed.
How a Statement of Advice fits into Australia’s financial advice system
The SOA is a core consumer protection document within Australia’s financial advice framework. When a financial adviser provides personal advice — meaning advice that takes into account your objectives, financial situation, or needs — they are generally required to document that advice in an SOA.
This requirement sits alongside other regulatory obligations such as operating under an Australian Financial Services Licence (AFSL), meeting professional education and ethical standards, and complying with the Best Interests Duty (which remains subject to ongoing refinement under Delivering Better Financial Outcomes reforms).
Many of these obligations were strengthened through legislative reforms implemented after the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Consumers can confirm whether an adviser is authorised to provide personal advice by checking the ASIC Financial Advisers Register.
What information is included in a Statement of Advice?
The exact structure varies between advice firms, but SOAs typically document five core elements:
- Your financial position
A summary of your financial circumstances, goals, and risk tolerance that forms the basis of the advice.
- Recommended strategies
The financial strategies being suggested. This might include superannuation changes, investment allocation, retirement income planning, or insurance structures.
- Reasons the advice is considered appropriate
An explanation linking the recommendations to your stated objectives and circumstances.
- Fees and costs
Details of advice fees, implementation costs, and any ongoing service charges.
- Conflicts of interest and required disclosures
Disclosure of any relationships, associations, or remuneration structures that could reasonably influence the advice being provided, along with other required regulatory disclosures.
More complex advice situations usually result in longer documents because additional explanation is required to meet disclosure requirements.
When people typically receive a Statement of Advice
Most people encounter an SOA after engaging an adviser to develop structured personal advice. This commonly occurs when:
- Creating a comprehensive financial plan
- Preparing for retirement
- Restructuring superannuation
- Establishing investment strategies
- Reviewing insurance arrangements
The document is normally presented after the information-gathering and strategy development stages, giving the client an opportunity to review the recommendations before implementation decisions are made.
How SOAs have changed in recent years
Historically, SOAs often became lengthy compliance documents. Some extended well beyond 100 pages as disclosure requirements expanded, which made them difficult for many consumers to navigate.
Recent regulatory reform efforts have focused on improving clarity and usability rather than simply increasing disclosure. Ongoing policy changes, including the Delivering Better Financial Outcomes reforms, are intended to support simpler and more consumer-focused advice documentation while maintaining core protections.
This has led many advice firms to move toward shorter and more targeted advice documents where the complexity of the advice allows.
Common misunderstandings about Statements of Advice
An SOA is not a contract
Receiving an SOA does not mean you must proceed with the advice. It explains recommendations but does not create any obligation to act.
An SOA does not guarantee results
The document explains strategy, assumptions, and risks. It does not promise investment performance or financial outcomes.
Not every piece of advice requires a new SOA
In certain situations, advisers may instead provide a Record of Advice (ROA). This usually applies where advice is provided to an existing client and builds on previous recommendations rather than introducing a new strategy.
An SOA does not mean a regulator has approved the advice
The document explains why an adviser believes a strategy is appropriate. It does not mean ASIC or any regulator has endorsed the recommendation.
Why the Statement of Advice matters for consumers
From a practical perspective, the SOA provides a clear written record of professional advice.
It allows you to:
- Understand what is being recommended
- Review the reasoning behind the strategy
- See the cost of advice clearly
- Compare options before proceeding
- Refer back to the advice later if circumstances change
Many clients keep their SOA as a reference point for future reviews or when reassessing their financial strategy.
How SOAs relate to ongoing advice relationships
Financial advice is rarely a single document event. After the initial SOA is provided, future updates may be documented in different ways depending on the nature of the advice.
For example:
- A new SOA may be required if strategy changes significantly
- An ROA may document smaller adjustments
- Periodic review reports may accompany ongoing service arrangements
This reflects the ongoing nature of most adviser–client relationships rather than a one-off transaction.
Frequently asked questions
Is a Statement of Advice legally required?
Yes. In most situations where personal financial advice is provided to a retail client, an SOA is required under the Corporations Act. Limited exceptions exist, such as certain time-critical advice situations defined in legislation.
How long is a typical Statement of Advice?
Length varies depending on complexity. Simple advice may result in documents under 20 pages, while complex strategies can produce substantially longer documents. Industry reforms are encouraging clearer and more concise formats.
Do you have to follow the advice in an SOA?
No. You can choose whether to proceed after reviewing the document and discussing it with your adviser.
Can you ask questions about your SOA?
Yes. Advisers are expected to explain their recommendations and answer questions so you understand the advice before deciding whether to proceed.
Related glossary terms
Financial Adviser
Australian Financial Services Licence (AFSL)
ASIC Financial Advisers Register
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