How to make the vital roles of information gathering, charges comparison and thorough research less time-consuming and more enjoyable
In my last article for Money Marketing, I looked at how paraplanners can take suitability reports to the next level. But what happens before that stage? Getting the information needed, accurately comparing charges and undertaking thorough research are all essential before the advice is formulated and a report can be created.
Let’s break these down into sections and look at some tips for each one.
A quick straw poll around the office on the joys of calling providers to obtain information on existing plans shows it is by far the most frustrating part of the job.
There was a lot of naming and shaming of the worst offenders for long wait times and inaccurate and unhelpful information (I’m looking at you, Aviva and St James’s Place) although, surprisingly, some shout-outs to companies that were particularly good (doffs cap at Royal London and Octopus here).
Here are some tips for minimising the pain of this element of the advice process:
- Ensure that you know the requirements of each provider (i.e. do they need a wet signature, is fax/email acceptable, do you have the right department?) and send off with a thorough covering letter requesting everything you need. The majority will just send a standard information pack anyway, but some do take the time to respond more fully to your questions;
- Always make a note of who you spoke to, on what number, and when. Mistakes can and do happen and you need to be able to follow the audit trail back when this occurs;
- A huge amount of data is now online, so have a good look there before resorting to the phone;
- Request turnaround times, then call a couple of days before that quoted date to ensure it is still in the system/coming out when expected;
- Most providers have a budget to provide compensation for particularly poor service, so don’t be afraid to invoice for the time wasted if your experience goes from merely frustrating to problematic for you and the client;
- If calling Aviva, get in the queue and then make a cuppa.
Charges comparison is particularly tricky post-Mifid II, due to the inconsistencies of information being provided by different companies.
You want to compare apples with apples, but one company transparently declares absolutely all charges and incidental costs, while another still just details a headline rate. This comparison would not be accurate but could be misleading.Charges comparison tips include:
- If you have an FE Analytics licence, have a look at its costs and charges calculator. It pulls through all the data available and does the initial calculation for you. It may still need some fiddling if providers are not being consistent, but it takes some of the hard work out;
- Be reasonable. You can only give the data that is available. As long as you’ve undertaken your best endeavours to get all the available information and presented it to the client in a clear format, you’re good. Don’t waste hours searching for something that might not be there;
- Table, table, table. There is so much information needed now, in both percentage and pounds and pence, a table is the clearest format to help clients understand the impact of charges on their holdings.
First, if you are undertaking whole of market research on every case, then stop (unless it’s protection, in which case, as you were). Fund and provider picking on each case is:
- Unlikely to result in consistent client outcomes;
- A nightmare to review and rebalance.
Centralised investment propositions and robust platform due diligence should be undertaken, with strategies matched to client categories. They should be done and then reviewed once or twice a year.
Done well, they provide a starting point for clients, will save a huge amount of time, and provide a detailed audit trail for plan selection (something I have seen the Financial Ombudsman Service query on cases where a provider was selected on a more ad hoc basis).
They will not be automatically suitable for all clients but they will clearly identify which clients they will and, more importantly, will not work for, and these parameters need to be carefully considered. If it takes away the leg work on, say, 75 per cent of cases, and inherently reduces risk within the firm by providing consistency to clients, then it is time well-spent.
Paraplanning is about much more than report writing and the above is just part of the process before getting to that stage. It can certainly be challenging but it keeps us on our toes, right? And who doesn’t love an hour of Greensleeves…?
Cathi Harrison is founder and director of Para-Sols