equired to identify the client's relevant circumstances if an adviser intends to rely on the safe harbour steps in s961B to meet best interest duty obligations. Step 3: Advice formulation and documentation An adviser must provide a level of service commensurate with the client's needs and must not 'over-service' the client to generate more remuneration. Identifyconflictsofinterest: An adviser should identify any conf I icts they may have with the client's interests e.g. to identify related parties. o Relevant Financial Services Guide and Product Disclosure Statementmayassistinidentifyingconflicts. o Consider who is likely to benef it from providing advice to the client. o Identify how the advice provider or a related party is likely to benef it. Step 4: Advice preparation and acceptance Usually where personal advice is provided to a retail client, a Statement of Advice (SOA) must be provided to the client at the same time as, or as soon as, possible. According to many licensees, it is the preparation of the advice documentation that is the most costly and labour-intensive part of the advice process. In practice, the size of the document varies signif i cantly between licensees with the average SOA length being around 30-40 pages (excluding appendices). Step 5: Implementation Once the client has had time to review the plan and has agreed that the recommendations in the plan are acceptable, the plan must be implemented. If there are investments to be made, or changed, superannuation issues to be dealt with, solicitors, accountants or insurance agents to contact, these aspects all need to be addressed. The f i nancial planner's role in this step is to ensure that all necessary paperwork is completed and that the client is fully aware of the steps necessary to implement the plan. Step 6: Ongoing reviews The f i nal step in the f i nancial planning process is to ensure that the plan remains relevant to the client. It is essential that the f i nancial plan be reviewed at least annually or more frequently because of the possible changes that can take place.
Any adjustments to the plan are required to take into account changing circumstancesoftheclientinordertobetterreflectthenewsituationandcurrent goals and objectives. Possible changes to trigger a review may include: Ā· change or loss of job " change in marital status Ā· birth of a child Ā· an inheritance " death " changes in the f i nancial environment client recognises that his/her goals have changed Ā· change to government legislation. Maintenance versus review of a plan It is important to know the dif ference between agreeing to review the client's f i nancial plan, and agreeing to maintain it. They are procedures that imply dif ferent responsibilities for the f i nancial planner and dif f ering cost structures. Maintaining af i nancial plan Maintaining a f i nancial plan allows to provide cost-effective and ef f i c