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Financial Paraplanning & The Role Of Financial Advice

Everyone needs a Financial Planner or Advisor. A good financial adviser takes the time to get to know you. They collaborate with you to determine your financial objectives and devise a strategy to help you reach them. This blog will help you to better understand how a financial planner works for your financial benefits. And we’ll start with the essential document of Financial paraplanning, which is a Statement of Advice or an SoA.

What is a Statement of Advice or SoA?

So, a statement of advice or SoA is a document prepared by a financial advisor for his or her client. this document articulates information about financial advice which usually contains.

  • The financial advice

  • The basis and proof of the given advice

  • Fee structure commissions and other associations of the advisor

​​An SoA is like a financial plan that helps the client to define and prioritize their financial goals. These documents are personalized as per the client's current financial situation. and it offers a roadmap of how to achieve your financial goals.

What does an SOA cover and what can you expect?

SOA is the essential document for giving financial advice. but there are some rules to be followed to provide an SOA in Australia. First of all, it must be provided following the financial services Reform Act 2002. the major parts of an SOA are.

  • Outline the recommendations

  • Reasons behind each recommendation

  • Benefits for the client

Moreover, an SOA should be filled with information that is clear, concise, and efficient. the information should be easy to interpret or understand which is clear. There should be adequate information in clear and few words, which is concise. and Lastly, the data should be good enough to give the desired outcome to a client which is effective. Apart from clear concise and effective data is SoA must be filled with details like.

  • Date of advice

  • Description of the personal advice

  • Best interest obligations

  • Types of services

  • Company details like contact number and AFSL number

  • Personal insurance recommendation and opinion

  • Recommendation on investment and fund management

  • Disclosure of information of remuneration commission and other benefits

The Future Of SOA

If we see any SOA from two decades ago it was a lengthy document nobody wants to read. but over time SoA has become slightly shorter and hence slightly interesting. SOS is usually filled with disclosures and compliance overlay. Such SOA is far from clear, concise, and effective. Just like we are using better communication channels in other aspects of our lives, the way people do SOA is also changing. Keeping the end-user experience in mind, it is crucial to make SOAs more than just piles of legal documents.

The next decade of advice delivery will look and feel more interesting and educational. The use of technology can improve the advice delivery experience. The digital form of SOA may contain icon symbols, graphics, audio, and even videos. So when an SoA is visibly more interesting, people tend to read it with full attention. A digital statement of advice is going to replace the piles of A4 pages very soon.

Importance Of Financial Planning

From individuals to multinational companies, financialPlanning is crucial for everyone. Good financial planning helps to frame goals, regulations, procedures, and the budget of any financial activity. It is also important to determine capital requirements and structure.

P.S. a financial planner will make sure the financial resources are utilized at their best.

Investor Behavior

Not everyone is logical when it comes to financial planning. That is why there is a whole field of study that explains our behaviour when it comes to financial planning. This study Is called investor behaviour. investor behaviour is an attempt to understand and explain the influence of human emotions on financial and investment decision-making. Investor behaviour can be determined by several things like:

  • Financial planning maintains the stability of funds by balancing outflow and inflow.

  • It reduces financial uncertainty by ensuring financial stability and profitability.

  • It will ensure that the fund suppliers are investing in companies with strong financial planning.

  • Financial planning fuels the growth and expansion of the company.

Insurance Needs

Sometimes investors see insurance as an investment. It is important to understand that these two are completely different. Some insurance companies allow you to build a particular cash value. However, buying a policy does not always make sense for getting heavy returns every time. Insurance needs also depend on family size, dependency, age, etc. those who lack the discipline to invest, can leverage a cash value insurance policy.


Another important factor is under or over insurance. Underinsurance is when an investor is insuring for an amount above the market value. Whereas over insurance is insuring for less than market value. With over-insurance, you are at risk of too much pain in premiums from the moment that the market value of the insured property is less than the amount insured.

Lack of awareness

Lack of awareness may lead to a low profile among its peers for any investor. It is one of the key challenges on the road to financial planning. Lack of awareness makes people buy insurance as an investment, under or over insurance, or a very weak portfolio in the share market.

Role Of A Financial Advisor

A financial advisor is one person who gives genuine guidance on how, where, and when to invest. take you, Advisors, either as a whole financial plan or they give tips that go towards a larger financial goal. they surely cannot control the share market but they can control how you should invest. A good financial advisor reminds us to invest wisely. They have to decide financial instruments, how much to invest, how frequently to invest, and also take correcting measures if required.

Now you must be thinking there is already an array of information available on the internet about investing. Then why do I need a financial advisor? or do I need a financial advisor? Well, a financial advisor is a professional in giving financial advice to their clients. They use their expertise and experience to help their clients get the maximum benefits out of the share market or any other investment they might have. A financial advisor not only helps an individual But also kind companies and organizations achieve their financial goals.

Let's have a look at how financial Advisors help companies and organizations:

  • They keep companies' finances in order.

  • They provide a neutral perspective on corporate development projects.

  • They help assess the profitability of any project or investment.

Financial planning is a step-by-step process for achieving one's life objectives. A financial plan serves as a guide as you travel through life. Contact us if you want to hire our exceptional skills in the financial advice industry. We're here to help you succeed in your financial journey.


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