Do Your Clients Understand You?


Could you demonstrate to the FMA that your clients understand your advice?

  • Yes - I think I’m okay (52%)
  • I’m going above and beyond the requirements (27%)
  • Not sure (11%)
  • It’s something I need to review (8%)
  • No (3%)

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A tick-box system to help establish clients have understood the advice offered to them was suggested this week by Compliance Refinery CEO Steve Burgess.

“The FMA seeks tangible evidence of advisers ensuring client understanding,” he says. “Merely obtaining a client’s signature on an authority to proceed falls short.”

Burgess says a more effective approach involves incorporating a tick-box disclaimer into the authority to proceed, “…prompting clients to acknowledge understanding before signing”.

This, says Burgess, should be supplemented with thorough file notes demonstrating efforts to assess and confirm the client’s comprehension.

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See our report: More Work Needed to Increase Client Engagement