During the several years that I’ve worked within the Financial Services Industry, there hasn’t been any disruptions and revelations as significant as the those that followed the Financial Services Royal Commission.
It’s fair to say many of us may feel a little battered and bruised in terms of the media fire that followed, boards have been flushed, CEOs sacked – and yet we’re still left with the question: “what does this mean for the future of my business, and my clients?”
ASIC has said the big four banks and AMP are expected to pay more than $1.15 billion in compensation, including about $350 million already paid or offered to customers. This is also set to rise, as the banks have not completed their reviews into the full scope beyond 2013. [1]
In short – the days of vague service agreements outlining fees covering service not delivered are gone. Those of us already operating and embracing this new world should be pleased with this necessary disruption in the financial services industry.
Together, we can look forward to the era where that bar has finally risen incorporating real university grade professional standards, rouge advisers are banned – and not recycled, and we facilitate and observe true transparency of advice between the adviser and client relationship.
AFSLs have scrambled to write new advice standards and guides for their advisers, which predominantly recommend the production of far more detailed and in some cases highly templated file notes. These are pure adviser derived representations of a meeting between the client and the adviser. File notes are important in terms of delivering context to the client adviser discussion, relationship and advice journey. It can also be argued that this facility does not provide a client with transparency of the meeting, nor does it provide a guaranteed compliance outcome.
The ability to directly enforce compliance standards across licensed practices by digitizing the client engagement process and providing a platform for clients to view to all advice strategies recommended and implemented, offers complete transparency to the client.
In order for an AFSL, practice or adviser to prove they have met their best interest obligations and provide compliant advice that is closely scoped to the clients goals and objectives – is to adopt a digital system of complete transparency around meetings, advice presented and outcomes discussed. This automated approach to compliance is the key to advice practices surviving into the future. Not only is this a positive outcome for the industry, most importantly it is an opportunity!
To create a successful business of the future, innovative technology should be embraced, and every effort made to digitize operations. I strongly believe in this and through my role at Purplebox, I have helped businesses in the Financial Industry to embrace new systems, including our my.solutions product. my.solutions has been purpose built to meet the needs of financial planning businesses, to assist them in more streamlined and compliant management of client data. Our system allows financial planners to create detailed client profiles, and manage the full history of advice presented, as well as managing new leads. I believe this makes it the perfect tool to assist the successful financial planning firms of the future.
References:
[1] ABC News 2019 – https://www.abc.net.au/news/2019-03-11/banks-drag-feet-on-fees-for-no-service-response-asic-says/10889194