Adviser Record Keeping Lacking, Warns Compliance Expert


A specialist in compliance for adviser businesses, particularly in risk and investment, says good record keeping practices are lacking among advisers.

Adviser Business Compliance (ABC) Director, Gavin Austin, established his consultancy firm in 2013 and has been in the financial services sector for 49 years.

Adviser Business Compliance Director, Gavin Austin

Austin works with advisers to establish how their business practices measure up to the Code of Conduct requirements, currently for AFAs while the new Code awaits approval, and how they can describe and evidence a good process of advice.

“The findings I’ve found over the last five to six years is that record keeping is a fairly common issue,” Austin said.

He said he has noticed a common issue with Code standard 12 of the AFA Code relating to record keeping, in a number of cases brought before the Financial Advisers Disciplinary Committee.

“There were no records to support any defence, there were no records to show that certain information was gathered or appropriate research was done,” he explained.

“What I’m saying in respect of risk advisers is these particular Code standards are going to be in the new Code – what happens in the AFA space will happen in the RFA space.”

“Keeping good records is a very key issue around good advice so that you are able to show that you are keeping records of all the pertinent matters that are required under the Code.”

He advises his clients to make clear concise diary notes that can be kept on hardcopy or as digital files and to make sure they keep emails and attach them to their client files.

“Advisers walk around in their business with all of this information in their head and that just doesn’t work,” he said.

“Advisers just don’t write enough down or they don’t keep the notes they take.”

Austin said he sees this problem throughout the advice process but in different degrees.

“It can have minimal impact in some respects but it also could have serious impact if there was ever a challenge made,” he said.

“So it’s important that people do make diary notes and keep good records of the discussions around any points that might be raised.”