Chapter 3 - The Advice Process and Documentation
This lesson outlines key guidance on when a Record of Advice (ROA) can be used for further advice, and when a Statement of Advice (SOA) is required instead. It answers common questions to help you apply these rules confidently and ensure your advice remains appropriate and compliant.
1. When can an ROA be used for further advice?
An ROA may only be used where all of the following conditions are met:
the client has previously received an SOA relevant to the further advice;
the client’s relevant personal circumstances have not changed significantly; and
the basis on which the further advice is provided has not changed significantly from the basis of the previous SOA.
2. What are examples of material changes to client circumstances?
Examples include major life or financial events such as changes in income, new or increased debt, divorce, inheritance, retirement, or significant health events.
3. Can an ROA rely on more than one previous SOA?
Yes. Where more than one SOA is relevant to the further advice, each relevant SOA must be referenced in the ROA. There is no requirement to list every historical SOA—only those that form the basis of the advice.
4. Do I need to document why the information is not materially different?
Yes. You must retain sufficient records on file to demonstrate that the client’s circumstances and the basis of advice have not significantly changed.
5. Does a change in risk profile require an SOA?
Yes. A change in risk profile level, such as from High Growth to Growth or Growth to High Growth, is considered a significant change and requires an SOA.
6. Can advice previously recommended to one member of a couple be extended to the other through an ROA?
No. If a strategy or investment type was recommended only to Spouse A, an ROA cannot later be used to recommend the same strategy to Spouse B merely because the original SOA was addressed to both clients.
7. What product fees need to be disclosed?
Only costs that change as a result of the advice need to be disclosed; the ROA does not need to restate all product costs. Where relevant, a product cost comparison table must be included.
8. Can an ROA be used to change pension types?
No, where the change is material. For example, changing from a Transition to Retirement (TTR) Pension to an Account-Based Pension requires an SOA.
9. Can an ROA introduce a new asset class or investment type?
No. For example, if the previous SOA only recommended retail managed funds, an SOA would generally be required before recommending SMAs. Likewise, an ROA may not be suitable where the advice moves the client into a materially different investment approach, such as ETFs, direct shares, hedge funds or geared funds not previously addressed.
10. Can an ROA be used for an investment switch or portfolio rebalance?
Yes, where the change is non-significant and all ROA conditions are met. Examples include an asset reduction to facilitate ad hoc withdrawal and investing additional funds into an existing portfolio.
⚠️Note: An ROA cannot be used for wholesale changes to the portfolio’s fundamental structure, including changes that alter the client’s risk profile, materially change the asset allocation, or move the portfolio away from the client’s established investment preferences.
11. Can an ROA recommend a different type of super contribution?
Usually no. A new type of contribution not previously addressed, for example, moving from salary sacrifice to a non-concessional contribution generally requires an SOA.
12. Can an ROA be used to recommend increased borrowings?
No. Any recommendation to increase a client’s borrowings must be documented in an SOA. Recommending that a client increase their borrowings (take on more debt) is considered a material and potentially higher-risk financial strategy because it can significantly affect the client's financial position, cash flow, risk profile, and ability to meet future obligations.
👉Read our full Further Advice/ROA Policy here: IIP Dealer Group – Further Advice Policy