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Proving your client proposition to the FCA

How do you prove to the FCA that your client service exactly matches your advice proposition? Make use of your back-office software, says Ann Dempster, managing director, Plum Software

One of the investigations being undertaken by the FCA is to check that what advisers are doing for their clients is exactly what they describe in their proposition.

When you have a compliance visit, all the different events making up the fulfilment of the proposition may be recorded in several areas. You might be keeping contact notes, generating and receiving emails, producing letters with attachments, sending out a brochure, giving business cards etc. and there may be several people involved. You can put all the events to be monitored into a check list to track and then it is easier to show that you have followed the processes as described in your proposition. These events can be ticked off as each one is completed but there may also be letters, documents, telephone call details, emails on several PCs, your standard documentation such as terms of business and other items.

These items also need to be readily available for other parts of the business. For example, a suitability letter needs to be cross referenced with the policy, a telephone call is logged against a person and you may need to check what has been actioned in a day. You may link these events to time costing, some events may be linked to the New Business Register and some events may be part of your management information (MI) reporting. The advantage in using well-designed software is that these events can be cross referenced across the many aspects of the business and you only need to log the event once and store associated documentation in one place.

Using the CRM (Customer Relationship Management) part of your back-office software, you can set up a track in which you specify all the events that need to be monitored. There could be several tracks for different types of proposition. You can also attach more than one track to the client, for example if you are providing an enhanced service. Each event can be linked to the appropriate person and time periods between each event can be set. Several events can happen simultaneously and different people can be assigned tasks. When a task is complete, it may activate one or more tasks, each with its own time period and person, and after the lapsed period, the task appears on the appropriate person’s ‘To Do’ list. Alternatively, actual dates can be used, for example, a yearly review may be linked to a date, not to a preceding activity.

You can attach a Word template to each track so that the appropriate letter/form can be created when the event occurs on the ‘To Do’ list. This can be used as guidance so that the appropriate letter is used for the event, for example the terms of business letter for each proposition type. Once generated, the letter or form can be stored against the diary as part of the log of completed events.

When a Track is attached to a client, it can be modified to suit the servicing of the client. Additional events can be added, deleted or made Not Applicable. Different people can be assigned different tasks and time periods can be altered.

The tracks can be shown as your means of monitoring the propositions and the diary events with attachments can be shown as how the events are completed. This includes any additional events – as each client is treated separately.

Tracks can be used to manage many other aspects of the business, such as processing new business with direct updates of the new business register items as you progress the piece of business. Track events can also be used for your MI. So, when designing track events, it is good to bear in mind how they can help in monitoring the business of the firm. One example is to include track events such as ‘Send ISA Information’ and ‘ISA Appointment’ to monitor how many responded to the reminder and made an appointment to discuss an ISA.

For many, the working day can be centred on the ‘To Do’ list with direct access to the client, policy, diary, documents etc. You can look at your future ‘To Do’ list to check the forthcoming tasks and view other’s lists, for example if they are off sick. The important thing is to design the tracks so that they are your “tool not your master”. They need to reflect the level at which you need to monitor events and match your business needs. The two extremes are that you forget to do tasks and at the other extreme, the To Do List is overcrowded with too much detail.

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