James Wortley hasn't produced a paper-based SOA in the last 2.5 years. Instead, he presents 100% of his SOA's to clients using video. James has built a fully fee-for-service practice and says he and his team build holistic relationships with their clients, but they don't deliver holistic advice.
There is so much we can unpack here, so we've pulled together some of James' responses from last week's XY+ web event as he took us under the bonnet to demonstrate how he is delivering video SOA's, and getting a tick from compliance.
Emily: So James, how did you get to this point in your advice journey?
James: Three years ago I made the decision to go self-licensed. I wanted to be able to control the advice I was delivering rather than be held to someone else's set of rules in what we could and couldn't do.
The other thing I always kept coming back to was the client. Somewhere along the line in delivering 'compliant' advice, the clients have been forgotten. I kept asking myself 'how can we [as an industry] reinvigorate the relationships we have with our clients?' And the thing that always stood out was the Statement of Advice.
We then set out to answer the question 'how do provide advice from the client's point of view?'. We sought legal advice which highlighted this paragraph from the Corporations Act which forms the basis of our ability to deliver video SOA's:
Under the corporations act a Statement of Advice can be given by an advice provider to a client in either printed or electronic form. This has been interpreted by ASIC to mean that the corporations act allows a Statement of Advice to incorporate a range of digital features such as video, audio, interactive menu features, radio buttons, Q&A, animation and gamification.
Emily: You mentioned you don't do holistic advice James. Can you elaborate on that?
James: Yes, we moved away from holistic advice when we went self-licensed. We still build holistic relationships with our clients, we just separate the parts of advice and deliver it to the client in stages, prioritising the most important first. This has been a game changer in improving the client experience. We can turn a piece of advice around in under 24 hours, and it means no video SOA presentation will go over 10 minutes. I'm a bit of a dictator when it comes to the length of the video, because again, it's all about the client experience and we want them to be excited and engaged in the process.
Emily: Ok, so how are you charging for this style of advice?
James: We are a fee-for-service business. When we sit down with a new client after going through the discovery phase we'll say something along the lines of 'based on all of the services we're going to provide to you, your cost is going to be $5,000 per year. If you're happy to go ahead with us, you will start paying a monthly retainer from today. We'll start working with you from today'.
Emily: Let's go under the bonnet and look at this from a practical point of view. How are you actually creating and presenting your video SOA's?
James: Ok, so a good place to start is with the tech. We use a video software called OBS (Open Broadcaster Software). It's free, you can download it directly onto your computer.
We chose OBS because it gives us the ability to record video while using three screens. I have my laptop set up where I can talk to the camera, and dual screens above so I can move across to the presentation slides and anything else I need to cover off in the video.
From a practical standpoint, once we have recorded the video, we put all the required links into a Dropbox folder which then gets emailed to the client. Typically, this folder will include the actual video, the client's financial position summary, the scope of advice, a goals report, additional information and the PowerPoint presentation of the advice - which we talk through in the video.
To expand on this some more, we use Astute Wheel to produce the fact find and goals report. The scope of the advice we include in the Dropbox folder is critical. This is something we are working with ASIC to make sure clients fully understand what advice we are actually providing for them.
(A screenshot of ([part of] an example 'Scope of Advice' James includes in the Dropbox link for a client.)
The additional information document we include could be an insurance need analysis, or something else relevant to the scoped advice we are delivering at that point in time. This will include the things which often blow a paper-based SOA out into 40, 60, or god forbid 100 pages. The powerpoint presentation includes an executive summary, some information about the adviser (one slide), the recommendations, the basis of advice, the things to consider, alternatives and any disclosures.
What's important to understand here is we have built this entire process directly from the RG90 framework provided by ASIC.
Emily: Ok, so you've put a lot of effort into getting to this point. What has been the result for your clients and for you as a business?
James: This has been an absolute game-changer in every regard. From a business and efficiency point of view, we can turn a piece of scoped advice around in under 24 hours. We're also getting paid for the work we are doing for clients from day one, which provides a level of certainty with cashflow and revenue.
Most importantly, this process has significantly improved the client experience. We have not had one client push back on our video SOA's, they love the experience. They have the flexibility to watch the video in their own time and then come back to us with any questions, and we've found they are far more engaged and active in the process.