How to improve your AA review Hayley Carless

How to improve your advice assurance review 2 1.Common areas of issue from advice assurance reviews 2.Common areas of incidents and complaints 3.Lessons learnt on issues and how to reduce them 4.The advice process and corresponding relevant documents

Top 5 areas of issue – Advice Assurance reviews IssueWhy is it important? The advice file does not contain adequate file notes and are of a sufficient quality‘Tells the story’. Can assist if a complaint is received. Can assist in demonstrating evidence of best interest. The adviser has taken appropriate steps to conduct relevant product researchEvidences how the strategy of the advice is linked to, or might be achieved by the product recommendation. Demonstrates compliance with ‘safe harbour’ requirement for best interests duty. The advice is likely to be in the best interests of the clientClients who rely on personal advice can suffer financial detriment if the advice is conflicted or not of good quality. The client may not achieve their needs and objectives in the short/long term. The advice document does not contain discussion on the expected advantages and implications of the recommended strategy Will assist the client to make a fully informed decision regarding the recommended strategy. Implementation has not been carried out as agreed with the client (including accurately completing the application forms) Failure to implement correctly can lead to a financial detriment to the client and the client possibly not achieving their goals in the short/long term. 80% of top 5 issues are operational or ‘process’ related.

Common areas of complaints and incidents in 2014/15 Internal office administrative errors e.g. delay/incorrect purchase of investment Ensure advice is implemented in line with what is documented in the advice document. If there is any variation to this, this needs to be noted on the file and the client should sign and acknowledge the variation. Late issuance of FDS FDS required to be issued annually where there is an ongoing fee arrangement FDS must be issued no more than 30 days after the end of the 12 month period. Root cause for late FDS is often failing to update FDS dates in Xplan or when a new book of business has been purchased. Your Practice Coach can help

Common areas of complaints and incidents in 2014/15 5 Exceeding superannuation contribution caps Root cause can often be due to incorrect and/or insufficient research into client’s superannuation contribution history. This includes insufficient fact finding. Alleged inappropriate advice Client not aware of certain features of strategy, costs, not invested in accordance with preferred risk profile

Lessons learnt Some Tips for minimising these types of issues: Use available templates and follow the advice process File note conversations and meetings with sufficient detail Use checklists and cross reference investments when implementing advice Use Xplan threads Stay up to date - Ensure you are aware of current business rules and standards. Seek assistance when you are not sure of requirements.

The Advice Process and Documents The Advice ProcessThe Documentation Engage and Understand the ClientFSG (record date of issuance, version and mode) Letter of Engagement AML – client ID (certified copy to be retained) File Notes Undertake reasonable enquiry/data collection (Understand the client and explore client options) Confidential Fact Find (signed and dated) Investor Risk Profile Product Research (existing and new) File Notes Document and provide adviceStatement of Advice Record of Advice Product Disclosure Statement (record client consent if issuing electronically) File Notes Implement adviceSigned Authority to Proceed Signed and accurately completed application forms Confirmation of implementation File Notes Ongoing serviceCopy of service agreement Financial Disclosure Statement Opt-In renewal notice and client written response (from 1 July 2015)

Need Assistance? Self help – resources RI Report Weekly newsletter updates RI Adviser Services Compliance/Policies and Professional Standards

Need Assistance? Assisted help – Contact Details Your Practice Coach or Regional Practice Development Manager Professional Standards Team T: E: Senior Advice Coach Phil Broadbent