There are key issues advisers need to always keep front of mind, says Compliance Refinery‘s CEO Steven Burgess. He points to a recent FSCL investigation that awarded a client $133,000.
One issues was that a client was handled by multiple advisers in one firm. Burgess says it seems one gave advice without asking the obvious questions one would expect.
“In this case the client met with two advisers and the original adviser did not pass on the proper information to the new adviser.
“The original conversations did not appear to have file notes, or the new adviser did not review them. It is very important that a new adviser reads and reviews the whole client file to better understand the client’s situation.”
Burgess says this also applies to advisers buying books, working with clients from another adviser, or when bringing a new adviser into the business.
“What is your process to ensure clients transition with little to no stress? Clients’ objectives can change and what is relevant one year may not be at the next review.”
Burgess says the case highlights that a proforma computer generated SoA was created for the client.
“We have seen a few advice processes where one SoA to the next are almost the same – irrespective of the client. It is important that SoAs cover all the personal aspects that are unique to the client and disclosure.”
The FSCL’s conclusion in the case referred to here, is that advisers within a firm should share information with each other about a client’s needs.
“It is also important for an adviser to ask questions about the client’s intentions and wishes, and to give – and record – advice about risk and investment timeframes,” states FSCL.