Adviser Business Compliance Director, Gavin Austin, says record-keeping is still integral to an advice business even though the newly approved Code of Professional Conduct does not have an equivalent to Standard 12 under the AFA Code, which specifically referred to record-keeping.
Although he noted the exception is that the reference in the AFA Code Standard 12 relating to client information is now in Standard 5 of the new Code, which states:
Protect Client Information
A person who gives financial advice must take reasonable steps to protect client information against loss and unauthorised access, use, modification, or disclosure.
Austin previously voiced his concern about the poor level of record keeping he had seen among advisers, see: Adviser Record Keeping Lacking, Warns Compliance Expert…).
He said although record-keeping does not comprise a specific Code standard, he said other aspects of the Code and Act itself and regulations will require record-keeping to be done.
“It’s just a matter of normal business practice…in the event that someone wants to question what you’ve done and how that meets the appropriate outcomes that the new Code and Act will seek to deliver to the public, you have to have good record keeping,” he said.
“I think that any interaction with a client should have some noted record, whether it be a file note regarding a telephone call, an email between a client and the adviser or any documentation that is supplied to the client.
“Make sure you have some acknowledge from clients around receiving the disclosure that’s going to be required under the new disclosure regulations,” he said, which are yet to be revealed.
“The ongoing interaction with any client needs to be also recorded so that if anything goes astray or goes wrong for any reason then you’ve got all of the necessary evidence to back up.
“It comes down to common sense and good business practice and how you do maintain and keep good records about the interactions with your clients and there’s no real prescribed way of doing that,” Austin said.