Compliance makes adviser life difficult

by |

Advisers are struggling to adapt their client communication, thanks to onerous demands from compliance departments.

Fee Disclosure Statement and SOA communication needs have changed, but The Fold managing director Claire Wivell Plater is worried that advisers are too accustomed to the language they already use and that they don’t realise where their communication is failing.

“They don’t realise sometimes that they use passive language, they use jargonistic terms or they don’t fully explain how the remuneration is collectively paid and what’s deducted…Because they’ve got a compliance person who’s really not a communicator, writing this stuff.”

She says there are three main challenges for advisers:

  1. Having the courage to know what they can throw out
  2. Expressing it in direct language, not passive language
  3. Getting the legal department off their back with all the disclaimers they have in place

 “A disclaimer belongs in a contract, it doesn’t belong in an advice document,” said Wivell Plater. “Compliance departments – of the large organisations in particular – try to make these things bullet proof by having disclaimers of all sorts in everything and sent to every client, and it loses its effect.”

She says that if advisers were treated as professionals by their peer group and their stakeholders then they wouldn’t need all the disclaimers. “A doctor and an accountant don’t disclaim their advice. They can never achieve true professionalism unless they get out of that mode.”

This inability to communicate clearly and trying to include too much may even result in being non-compliant. She says that the key thing for advisers to do is distinguish between a client objective, an adviser strategy and a means to achieving that.

“It means they can link their recommendation back to the client’s objective. But if they start by calling the strategy the ‘client objective’, they can never really do that in a way that client understands.”

The problem is that many larger institutions want to use templates for a very personal service, but Wivell Plater says that advisers really need to put themselves in the shoes of the client, and write from the perspective of what a client wants to read.

  • frank smith on 9/08/2013 1:59:54 PM

    Hi All,
    all of that all before and I have all the answers too. I'm working on getting in front of the PI insurers so I can help them to reduce their shocking claims experience and explain how. Don't blame them they are being burned by the lawyers. Kind regards,

  • GAB on 9/08/2013 9:18:04 AM

    Frank, if the regulator agrees and so does FOS then why aren't the dealer groups accommodating it. Is it something to do with PI cover perhaps? I'm sorry, that clause wasn't put in....we're not paying. Auth to proceed not signed properly....not paying. What about all the intricacies of replacement product and alternate strategies and alternate product that ASiC says we must include yet doctors and lawyers and accountants dont do that.

    Now that we have Best Interest Duty, shouldn't we be able to ditch all that extra requirements and just get down to the recommended strategy all on its own, so there is no confusion.

  • frank smith on 8/08/2013 10:51:47 PM

    Dear Claire,

    I thought I was the lone voice in the industry. I endorse everything you say. Welcome to the growing group of real compliance professionals who are prepared to speak out. Fantastic stuff and I've been pushing this wagon for years and even the Regulator agrees (and FOS too)

    Many thanks Frank Smith

  • GAB on 8/08/2013 2:24:25 PM

    It's not advisers like me that you need to convince, it's the LEGAL departments that create the SOAs that were once called "financial plans" years ago. I'd be more than happy to ditch the disclaimers....but I'm not the one you need to talk to.

  • Stephen on 8/08/2013 12:18:09 PM

    The person who wrote this seems to understand what the client wants versus what the advisor thinks the client wants. The last sentence should be sent to every advisor as a wake up call. The problem is that when you approach a legal practitioner, you have a clear cut objective but when you approach an advisor, all you really want is good advice that reflects "your" requirements including negative statements that should be adhered to. There is no reason to suggest a client should jump on the bandwagon generally because it has already left.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions