Two of the most important standards of the Code of Conduct are to treat clients fairly, and to act with integrity - and the Financial Services Council recently dug into what exactly that means for advisers, and what it looks like throughout the advice journey.
The customer’s advice journey consists of initiation of contact, inquiry, advice, implementation of advice, and review. According to DLA Piper partner Tracey Cross, who recently spoke to FSC members, those two Code standards are vital throughout every stage of the advice journey, and particularly the ‘first contact’ stage.
“Looking at where the Code standards really come into play, the standards around treating clients fairly and acting with integrity are present throughout the customer journey, and I think that’s fairly obvious,” Cross said.
“When you make that initial contact, the customer doesn’t know you at all, so when you're starting to build that relationship with them, that can be quite a challenging time for clients - for a start, because you’re talking about money, which a lot of people don’t really like to do.
“So the clients really need to be treated with respect, listened to, and taken along in an easy manner throughout that whole stage. And you will also be coming to know your client throughout that, and will be getting to understand any vulnerabilities that they have, which is a very important part of fair treatment.”
Documentation, and ensuring that a client understands the advice they’re given is also vital to fairness and integrity, and Cross said there are many different ways that an adviser can ensure that a client has understood the information they’ve been given.
“It really is a two-way relationship, it’s a discussion, and it’s also about going back and testing that the client understands everything that you’ve told them,” Cross said.
“And if you can see very clearly that one person really just doesn’t get it, go back and have another talk with them - whatever it takes for you to really get that comfort that they have understood the advice.”
“Then it’s really important to document that journey, so that you can actually show what you’ve advised on, how you’ve explained the nature and scope of it, how they’ve understood it and how you’ve tested that,” she added.
“You can do that by asking them, having discussions, continually going back over things, and then proceeding when you have the comfort to move forward.”
