Our report that inadequate record keeping has been identified as a common compliance issue attracted plenty of interest among Riskinfo readers this week..

Inadequate record keeping is one of the most common compliance issues identified during client reviews, says the team at Strategi.

Top of the list of FAP Standard Conditions states that FAPs must keep accurate records that can be supplied to the regulator within 10 working days if they ask for them.

“Records must provide enough details to show how your business and all those offering financial advice to retail clients followed the rules in the FMC Act, FMC Regulations, and the Code of Professional Conduct for Financial Advice Services,” states Strategi in a recent blog post.

“When reviewing individual client files, the FMA expects to find enough information to easily understand who the client is, their specific needs, the agreed scope of advice, the advice given – including analysis and reasons – the recommendations made, and how these recommendations are suitable for the client.”

Strategi says keeping well organised records shouldn’t disrupt business operations, and offers the following tips:

  • Use a CRM where all inbound and outbound emails are linked to the respective client file
  • This avoids dragging and dropping or even worse – cutting and pasting emails to a client file
  • If possible, operate a secure client portal where all client communications and documents sit and where they can be accessed by both the adviser and the client
  • Use transcription software and voice recording to collect client information and upload to the client file within the CRM
  • Use your cell phone to photograph documents like drawings and client notes from meetings and upload to the client file within the CRM

Click here to read the full Strategi post.