Compliance Matters September 2013 Webinar – Just do it!

In the next 90 mins… How to agree implementation? Why is this important? What if they don’t take all my advice? What is best practice?

Disclaimer This presentation is general in nature and should not be seen as personalised advice. It is designed to provide information to those practicing in the financial advice industry. It should not be relied upon as advice for your own practice. The management of IDS accept no liability for any loss or damage caused by this presentation, but will accept kindly any recognition for positive outcomes if you do act on the information.

Why is this important?

Because now it gets real.

Part two of the Customer Experience

Regulatory Requirements

Code Standard 12 An Authorised Financial Adviser must record in writing adequate information about any personalised services provided to a retail client.

AML/CFT In general, financial advisers who help people invest their money are likely to have obligations under the AML/CFT Act

You must have… Managing and mitigating the risks identified in your risk assessment Vetting of staff (if you have any) Training of relevant staff Applying appropriate customer due diligence (CDD) Suspicious transaction reporting (STR) Ensuring adequate records are kept Keeping your programme up-to-date Ensuring your business adheres to its AML/CFT programme he review and audit of your AML/CFT programme

Poll Have you completed your AML/CFT requirements?

Insurance Law You are still deemed to be an agent of the insurer if they pay you commissions. So if the client tells you, the insurer is deemed to know. Non-Disclosure is the biggest issue!!

DIMS Client on-boarding (Section A) (i) Understanding your client (ii) Explaining DIMS (iii) DIMS review DIMS proposition (Section B) (i) Investment authority (ii) Custody (iii) Portfolio reporting Ongoing service (Section C) (i) Instructions (ii) Record keeping (iii) Maintaining your ABS

FMCB AFAs providing DIMS will be required to have a legally enforceable written client agreement with their retail clients. This will need to adequately cover the matters required by regulations. AFAs will have to select and use an independent custodian to hold client money and client property unless otherwise permitted by the terms of their authorisation or regulations.

AFA Monitoring Feedback From the horses mouth..

Code Standard 12 No written records of why client has not followed the AFA’s advice ‘Authority to proceed’ form, used as part of the AFA’s process, was not held on particular client files There were insufficient details on file to demonstrate that adequate information was recorded about the personalised service provided Use of standard form/templates that don’t reflect the scope of service actually provided

ADVICE PROCESS REVIEWS

What are the common issues No sign off on variations No communication about risks of part implementation Products implemented differ from advice. Replacement of products advised to keep Non-product recommendations not followed up Review period not agreed No program of funds transfer or rationale

How should you implement?

Think Customer Experience

What are their expectations?

Clients concerns Have I made the right decision? How long is this process going to take? Hidden costs? What if we just do some of it know? Will I see them again?

Part Implementation

Part Solutions Why would they only do part of the solution? What are the affects of part implementation? How do you communicate the affects?

Poll Do you provide a written implementation schedule with all tasks and agree timeframes?

What does best practice look like?

Make it a process.

Explain what will happen Have a ‘Next Steps’ and ‘Options’ section in your advice. Explain the risks of not implementing. Sign off on the tasks and who will do them and by when. Make it easy to understand.

Communicate and Follow up Product implementation is half the story. Follow up Non-Product Tasks. Put them in your CRM. Communicate Changes through out implementation and how they affect the plan Emails are easy!

How do you know if you are getting it right?

Ask your Clients! Survey clients who you give advice and ask them what went well, what the found hard or why they didn’t proceed.

Poll Do you survey your clients after implementation?

Business Benefits You get agreement at each step before proceeding. If a client understands why they will buy. Help inform them to make better decisions Reduce the risk of the product not meeting their needs or doing its job.

ACTION POINTS Review current process and delivery. Get someone else to read your reports!! Ask clients for feedback on documentation.

Questions

Hopefully we have got you thinking.. Implementation is VERY important. Does your current process stack up? What will you change?

The End