Do longer SOAs break the law?

An Australian adviser magazine asked that question as the heading for an article. The provocatively titled article piece might receive a verdict of ‘not proven’ were we in Scotland, where such a judgment can actually be recorded. But the article is worth a read.

Monday, August 18th 2025, 11:03AM

by Russell Hutchinson

CPD: Do longer SOAs break the law? When is an ROA more appropriate? (And other key questions about the communication of advice) - AdviserVoice

There is concern at regulatory authorities about the increasing length of disclosure documents. They have even gone so far as to write requirements that the documents should be “Worded and presented in a clear, concise and effective manner.” But it appears to us that they have no idea how to actually achieve that. The document that injunction comes from runs to over 100 pages, and includes dozens of references to other documents, multiplying the total volume of guidance significantly.

The article discusses the pitfalls of excessively lengthy Statements of Advice (SOAs) in the Australian financial advice sector. It argues that while SOAs are intended to enhance consumer protection through transparency, overly complex and lengthy documents can disengage clients and undermine trust. Research has shown that shorter, clearer SOAs improve client comprehension and trust, suggesting a need for reform in how advice is delivered.

The article highlights findings from the Quality of Advice Review, which recommended replacing traditional SOAs with simpler records or offering written advice only upon client request. While the Australian government supports streamlining SOAs, it remains cautious about fully adopting such measures. It also notes that legal and technological neutrality allows for innovation in advice delivery, including digital and multimedia formats. But most advice providers won’t be doing that. A reasonably chunky SOA is considered to be the low-cost plus low-risk combination which will probably continue for the foreseeable future.

Applicability to New Zealand

I much prefer our regime. While many advisers choose to produce written SOAs, very simple types of advice delivered within the context of a well-defined relationship can be delivered without a written SOA.

The Australian experience offers insights, but New Zealand's distinct requirements for financial advice mean that direct application may be limited. However, adopting clearer, technology-enabled advice delivery could still benefit New Zealand’s sector by addressing similar challenges of client comprehension and engagement.

Tags: compliance Financial Advisers Regulation Russell Hutchinson