When was the last time we really thought about the Authority to Proceed, and whether we can improve it?
Investment and advice complaints to the Australian Financial Complaints Authority (AFCA) rose 18 per cent in 2024-25. The single biggest issue was a failure to act in the client's best interests. It made up more than 30 per cent of complaints in the category and jumped 124 per cent in a year.
Some of that came from large collapses like Shield Master Fund and First Guardian, which needs to be acknowledged. But the rest of the pattern is familiar to anyone who has sat across the table from an unhappy client. People rarely complain because they read ASIC's RG 175 and found a breach. They usually complain because they felt confused, misled, overcharged or ignored, and because the advice did not match what they thought they had agreed to.
It’s hard to know where the miscommunication failed. Was it the SOA? The way the advice was explained? Was it the way their queries were handled or the complexity of the language perhaps? But in most cases, usually the client's experience did not match their expectations, and they never had a comfortable way to raise it before it resulted in a formal complaint.
We get feedback too late
The problem is that some advisers only hear honest feedback when it is too late. Advice practices don’t typically collect feedback in a structured way after the presentation of advice. The standard approach is to rely on the adviser's perceptions, a conversation in the meeting, and a file note or recording that the client "understood the advice". That file note protects the practice – but does it do enough to confirm and give clients the space to make sure they understood the advice and can ask questions?
Which brings us to the Authority to Proceed (ATP).
Is the ATP really checking understanding?
The ATP is meant to do two jobs. It records the client's instruction to go ahead, and it asks them to agree and confirm they have read and understood the advice. The second job is where I think we can improve. A typical ATP hands the client a list of statements to agree to, such as:
- "We understand and accept the risks associated with the recommendations."
- "We agree that you have fully explained the risks and benefits of the advice and we understand the costs."
- "We have read and understood this Statement of Advice dated 30 April 2025, including the disclosure of fees and commissions."
A client ticks the boxes, signs, and we file it as evidence they understood. But a signature on a pre-written statement is not evidence of understanding. It is really evidence that the client wanted to proceed with implementation (that’s why it’s called “Authority to Proceed”) with signed off acknowledgements that mostly appear to protect the AFSL and adviser.
And what else do we ask clients to sign? A typical ATP has them confirm they received the FSG and the product disclosure statements. But proving those documents were provided is the practice's job, and the evidence already sits on file. Asking the client to vouch for our paperwork we have evidence for on file is redundant.
Confirming that the client understood the advice shouldn’t be the client's job. The duty to act in the client's best interests sits with the provider under section 961B of the Corporations Act. Asking a client to attest that we explained the costs does not move that duty onto them, and it will not save a practice if the advice was poor. So, if the acknowledgment does not protect us the way we assume it does, why are we using it the way we do?
The timing for an ATP rethink is good
Under the Delivering Better Financial Outcomes reforms, the Statement of Advice is (hopefully) set to be replaced by a Client Advice Record, a plain English, principles-based document designed to help clients make informed decisions. The direction of reform is towards client understanding rather than disclosure for its own sake.
But we can do this now.
What about a Post-Presentation Feedback Survey instead of the ATP?
What if the ATP explicitly confirmed whether the client understood, before we proceed?
We could combine a short post-meeting survey with the ATP. A handful of plain questions, answered by the client, that invite them to flag anything they are unsure about. It engages the client, gives them room to ask questions without pressure, and gives the adviser real comfort that the advice makes sense to them. If a client ticks "I need more clarification on the fees", you have caught the problem quickly instead of at AFCA.
We can and should be treating Best Interest Duty as a conversation, not disclosures and statements they agree to. The ATP is a natural place to stop and ask a simple question.
Did the client really understand this advice?
A short survey is a human way to connect compliance and understanding. It gives the client space to reflect and engage before they sign and proceed.
It can also be an excellent ‘client experience’ feedback loop
The survey can also act as an excellent client experience data collection instrument.
When you ask the same questions every time, the answers become data. Patterns surface something that a file note never would. If the majority of clients keep ticking "somewhat" on fee understanding, your fee explanation needs work. If "I need more time before proceeding" keeps coming up, something in the meeting is rushing people.
For an adviser, that is a clear indication of where to improve. For an AFSL, it is a practical way to monitor where advice is being provided well and where it is not, before those gaps turn into complaints.
There is room for feedback on the experience too. A short, open question about how the client found the experience tells you what is working and gives happy clients a place to say so.
Let’s not only re-think the SOA, but all elements of the SOA, and how we connect to clients and try to resolve those complaints before it’s too late.
Melanie Drago, Founder of Tanngo - an innovative new platform to help advisers and contractors work together online.
