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For the record

By now your firm should be well on the road to RDR-readiness with a consistent advice process in place, a clearly defined client service proposition, a great team in place to support your proposition and you will hopefully have started your proposition roll-out programme to new and existing clients. So, what is the next challenge? In short, making sure you can evidence what you are doing.

I attended an FSA RDR roadshow a few weeks ago which turned out to be an excellent use of my time. One thing that struck me was the emphasis placed on the requirement to provide an ongoing service where ongoing adviser charges are being levied. While we all know this to be the case post-RDR, it got me thinking the regulator will expect firms to keep demonstrating that:

  • What you commit to being provided has been provided
  • Where it has not been provided, for example, if a client has not responded to your annual review meeting invite, what you have done about it?

The first point will involve taking a step back and putting yourself in the shoes of a third party that looks at your files without knowing anything about the client or the relationship that the client has with the adviser and firm.

It’s that old adage, if it’s not written down, it didn’t happen. For example, if your service proposition states you will provide an annual planning review, you will need to provide the client with written evidence of the areas reviewed, the outcome and subsequent recommendations. This will then act as your evidence for this aspect of your service offering.

Without this evidence and, relying solely upon file notes or, worse still, nothing, you may find it difficult to defend any future complaints and to keep the regulator satisfied that you are providing a service for the ongoing adviser charge.

The second point is very subjective but it does raise the question of whether you can, or should, get 100 per cent of the ongoing adviser charge during a period when you have not delivered the service to which you have committed. It is food for thought but I would suggest that you retain evidence of your attempts to deliver the service, for example, a record of emails sent to clients requesting that they contact you to arrange a review meeting and a record of phone calls.

My final thought on this area is one of file reviews where an ongoing service is being provided. Given that you have new business reviewed by a third-party compliance service provider or an in-house compliance officer, it would also seem prudent to extend the scope of this oversight to include ongoing reviews.

By choosing to adopt this process, you can be confident that all avenues are covered.

Julie Hepworth, Group regulatory manager, Perspective Financial Group

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