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Accountants operating under the AFSL regime should be thoroughly explaining statements of advice to clients to ensure they avoid client disputes in the future, warns an industry lawyer.
Jaime Lumsden Kelly, a solicitor from The Fold Legal told Public Accountant that rather than just handing their clients a statement of advice, accountants should be walking them through the document to ensure they actually understand it.
“The SOA needs to be compliant. It should be clear, concise and effective and should set out all the strategies that you’re giving it should tell the client what you’re advising on, what the risks are, all that sort of information, but it’s not enough to just hand it over and give it to the client,” Ms Lumsden Kelly said.
“You should actually be walking them through that document, and that actually helps them to better understand it.”
Ms Lumsden Kelly said it is instances where the client doesn’t quite understand something or they think something means one thing when it means another where later a dispute arises.
“If you walk them through the document, that particular issue can be clarified and resolved much earlier.”
“In an ideal world, an SOA would be written in such a way that anybody could read it and pick it up, and ideally you should be still be able to do that, but I just think as a matter of client service, it is actual more helpful if you walk the client through what the document says and what it means to them. That way, if there are any questions they’ll be able to ask.”
Ms Lumsden Kelly warned that some clients may not bother to read the statement of advice document at all.
“Sure the client was given the document, but we are talking about best practice and helping avoid disputes in the first place,” she said.
“It’s not just about the disclosure document, it’s about the communication experience overall.”