Strategi has published guidelines on how brokers can simplify their advice process, and says it has been “great to see so many financial services firms embracing the new regime” and taking another look at how they run their businesses.
Executive director David Greenslade said the first key thing to do is to ensure you understand the principles of the new regime, and to make sure that clients are receiving all important information - particularly around the risks and disadvantages of any policy or product that they recommend.
He said it is also important to keep documents simple and write in plain English, and to structure them in a way that allows the client to save time without “drowning them in facts and figures.”
“When you’re talking about a balanced advice process, if you’re going through a product and its key features, benefits and why it’s suitable, you also need to be able to talk about the key risks and disadvantages so that the client understands the pros and the cons of the recommendations,” Greenslade said.
“You shouldn’t be omitting the things you don’t want the client to be seeing.”
“When we look at documents, we often have to say “look, you haven’t put anything here about the key risks and disadvantages”,” he explained.
“And their reply is often, sadly, ‘that’s because we don’t want to scare them away.’ You need to have a balanced approach, and that’s really hard-coded into the Code of Conduct.”
Greenslade also encouraged advisers to only request signatures when necessary, and to embrace digital platforms. He said a good way to do this is to look at the kind of digital experience other firms are offering, and see if you have room to adopt any improvements.
“Have a look at some of the digital platforms out there, and take lessons from them,” he said. “Most are attractive, nice and simple to navigate, and the advice output is short and easy to read. Adopting some of the digital platform concepts will help with redesigning your point of sale documents, and will improve your client experience.”
“There is no doubt compliance obligations have increased in the new financial advice regime,” he added. “However, this does not need to stultify the advice process. Provided you get good compliance advice, then you can be as innovative as you dare to be.”
