Scoping and Scaling Advice

Comprehensive Scope of Advice Reports are generated and forwarded to the client providing a compliant file note basis for a letter of engagement.

ASIC requirements:

  • Identify the client’s objectives, financial situation and needs disclosed through instructions (the client’s voice)
  • Identify the subject matter of the advice sought and the client’s objectives, financial situation and needs relevant to the subject matter (proof of adviser’s discussion with client to understand what they want to achieve and draw context from their circumstances)
  • Determine scope and scale of advice and ensure that the client understands the implications of limiting their advice (proof of the adviser’s discussion to ensure the client is proceeding in an informed manner)

ASIC’s RG244 and other linked RGs are very onerous.

  • All advice is scaled to some extent – advice is either less or more comprehensive in scope along a continuous spectrum (i.e. there are not two categories of advice: ‘scaled’ and ‘comprehensive’ advice)
  • To determine a limited scope of advice perform a ‘triage’ or filtering process
  • Implement systems that will help you decide whether scaled advice can be provided to a client that meets your legal obligations

First, we determine across each of the six areas of advice what will be In-Scope or Out-of-Scope. This is determined by the client’s self-rated 5 Minute Financial Health Check score, any relevant goals from the Goals Tool (both are auto linked to the wizard), and discussion.

Scope and Scale of Advice Tool

The Scale of Advice is then agreed with the client and any matters not addressed are discussed with the client to confirm they understand the implications of their decisions.

The Scope and Scale of Advice Tool is used in discussion so that the adviser:

  1. and client can agree as to which of the 6 areas of advice are to be included
  2. can explain to the client which strategies will be investigated and scaled in or out
  3. can identify which strategies are not relevant to the client
  4. can determine the reasons why certain things are either in or out of scope
  5. can produce a comprehensive compliant Scoping Document efficiently.

Drop down options and adviser notes are used to simplify this process and personalise for the client.

A comprehensive Scope of Advice Report is then generated and signed by the client, this provides a compliant file note as required by ASIC and becomes the basis for a letter of engagement.