In this article, Fidelity Life’s Trecia Brown discusses the importance of record keeping in advice businesses – including her top tips for keeping good records, especially under the new regulatory regime, where the need for good record keeping is more important than ever…
At Fidelity Life we’re on a mission to provide best-in-market support to advisers. Our Building Better Businesses programme aims to help set you and your business up for a successful future in the new financial advice regime, with the customer at the centre of everything you do.
In this article I’ll focus on a popular Building Better Businesses module: record keeping – what it is, why you should keep records and how to implement a record keeping process in your business.
What is record keeping?
Record keeping is the process of recording what happens in your business. It includes records you keep on your employees, contractors and your customers including the advice you provide to them. It can also include your business’s policies, processes and agreements.
Why keep records?
Good record keeping provides a trustworthy source of evidence to clearly show what you do in your business, and how you do it. It’s the proof that your procedures and policies are being carried out.
It also helps to provide good customer outcomes, keeping you up to date on your customers’ current circumstances and helping you resolve issues or complaints more effectively.
Record keeping is a standard condition for licencing. Financial Advice Providers are required to create records in a timely manner and maintain adequate records in relation to their financial advice service. It also supports compliance with other standard conditions.
Setting up record keeping in your business
When thinking about what records to keep and maintain, it might be helpful to group your requirements into two key categories:
- Records about the day-to day operations of your business; and
- Records about your customers and the advice you provide them.
Business operations records
Some records to keep for your day-to-day operations include financial, payroll and accounting records, employee and contractor agreements, and all your advertising and promotional material, including how you justify any claims you made in your advertising.
You should also keep registers in your business such as complaint registers, Continuous Professional Development documents (also known as CPD Plans and logs) and conflict of interest registers.
Customer records such as statements of advice, terms of engagement and disclosure should also be kept and maintained. File notes are important, noting records of meetings, conversations, texts, phone calls and emails between yourself and your customers, including any complaints.
My top tips for keeping good records:
- Have a record keeping policy – develop a policy that sets out your business’s requirements for maintaining, storing and destroying records, including time frames. This will help your business to ensure it complies with relevant legislative and regulatory requirements.
Make it an expectation that everyone in the business actively keeps records of their customer interactions up-to-date and continuously maintained.
- Have a place to store records – have a secure place to keep your customer file notes and documents. A Customer Relationship Management system (known as a CRM) is a common record keeping method, although records can be kept in physical files or on computer files as well. Records are an important source of evidence should you ever need it. The key is that whatever approach you take, it needs to be consistent.
- Keep records safe – your obligations under the Privacy Act 2020 include the requirement for you to have “reasonable safeguards in place to prevent loss, misuse or disclosure of personal information.” Consider having a system to back up your data and good Cyber IT practices such as password protection and firewalls for all your devices. If you keep physical files, it’s important that all cabinets are lockable and are accessible by authorised people only.
Remember, customers have the right to see their files, so ensure they’re easily accessible.
- Have good controls in place – implement version control on your policies and processes, and any advertising material. This is usually a simple numbering system that records any changes or reviews that have taken place to documents over time and helps ensure the most up to date documents are being used.
I also recommend checking out the Privacy Commissioner’s website privacy.org.nz for useful information and resources.
Remember, good record keeping is good business. It’s well worth investing time and resource in setting up a good record keeping system for your business so you’re all set for success under the new regime.
If you have any questions or would like more information please don’t hesitate to get in touch with your Fidelity Life Business Manager or visit advisers.fidelitylife.co.nz
Fidelity Life has provided this information in good faith with the intention to provide general business information. This information should not be substituted for legal, tax or other professional advice, may not be comprehensive, and should not be relied upon. We accept no liability for any loss suffered by any person or organisation relying directly or indirectly on the information published. © Fidelity Life Assurance Company Limited 2020.
Trecia Brown is Head of Solutions and Services, Fidelity Life. She is a recognised leader in adviser professional development and is passionate about helping advisers and advice businesses stay one step ahead in the face of near-constant change – both in the financial advice industry and in the broader business environment. As Head of Fidelity Life’s Solutions and Services team, Trecia is focused on how solutions, including advice technology, can help advisers build high performing, digitally-optimised businesses. Trecia is also the architect of Fidelity Life’s flagship Building Better Businesses programme.