The Financial Planning Association of Australia (FPA) has released its latest guidance on file notes to better help financial planners manage record-keeping following consumer complaints that highlighted gaps in records.
The FPA Professional Standards and Conduct Committee identified a gap in proper record-keeping in file notes as an area for improvement for the profession based on recent work with AFCA and recent case determinations.
The new guidance offers ways to help financial planners create file notes, including apps that can capture client communications using video or audio recording and convert them to text such as OneNote, Notability, and Evernote.
The FPA emphasised that well-documented record-keeping gives financial planners the evidence they need in litigation cases or if they are the subject of a complaint to the Australian Financial Complaints Authority (AFCA).
“Through our work with AFCA, the importance of keeping meticulous file notes was identified as an area for improvement for financial planners,” said FPA chief executive officer Dante De Gori CFP®.
“In reviewing AFCA reports and case law, detailed file notes were one of the biggest factors which help in defending financial planners. Unfortunately, in a dispute, the file is going to be the enduring evidence of the financial advice a planner has provided. It needs to tell the whole story.”
AFCA's chief ombudsmen David Locke highlighted that record-keeping and communication were key to avoiding and addressing complaints.
“Documents created at the same time as the activity or advice in question are usually given more weight than later recollections of what was said or done,” Locke said. “This means contemporaneous file notes of conversations and actions are solid gold when a dispute comes to us.”
De Gori added that files notes no longer need to be paper-based as there are new and more efficient ways for financial planners to build a proper audit trail through effective record-keeping.
“This not only gives greater clarity around why decisions are made but could be used when supporting evidence is needed,” De Gori continued.
