Sharing client data and PI cover were among the issues discussed in an FSC conference about FAPs setting up a locum agreement to cover unexpected absences of key staff.
Mary Potter, Northern Business Development Manager, ANZ Investments, says finding a locum can start with contacting industry groups such as Financial Advice NZ (which runs a locum scheme) or calling industry contacts.
“Potential locums are out there in your market place,” she says. “Talk to the dealer groups and compliance companies.”
Karty Mayne, Director Rosewill Consulting, says there are “…lots of good people floating about who have good industry knowledge and who will do the right thing for your business”.
Once a locum agreement is in place, Potter recommends it be regularly reviewed to identify any issues.
“Agreement should be reviewed annually and they should be tested,” she says. “Does your locum have all the passwords needed to login and access your diary? It may turn out they can’t step in as expected.
Speak to a compliance firm or your lawyer to set the agreement…
“Your locum’s business may have changed and they no longer have the capacity to help.”
On the issue of PI cover David Ireland, Partner, Dentons Kensington Swan, recommends FAPs talk to their broker to see if professional indemnity cover extends to their locums.
“You absolutely need this in place,” he says. “You should make sure your insurer is aware of the arrangements you have in place for your business.”
Mayne touched on the issue of privacy saying changes to the Privacy Act means there are now a lot of client “touch points” across the business.
“One is the terms of engagement with your client,” she says. “Perhaps it needs to be widened so clients understand that more people may need access to their information.
“Definitely the FMA should have access to client information and records. But also your compliance partner, your dispute resolution scheme, and now the locum.”
Potter recommends FAPs start putting locum plans in place now as arrangement can take time to complete.
“Speak to a compliance firm or your lawyer to set the agreement up because it is an important piece of documentation you need to get right,” she says.
Mark Banicevich, Head of Industry Engagement, Partners Life, says financial advisers often meet clients to explain the risks to their business.
“But like doctors are the worst patients, financial advisers often don’t have their own arrangements in place,” he says.
“And like other areas of risk, the risk may be small, but you don’t want it to happen to you. But it does happen, and it has happened to people I know.”
See our story: FSC Publishes Locum Advice Guide