Over the last year Strategi has conducted many compliance and best practice reviews for advisers operating in the newly regulated world. From these reviews Strategi has identified 7 habits for compliant advisers.
- Do what you say you do - You know what you do, and what your business does, but is this reflected in what you have said on the FSPR? Make sure what you do and what you say you do are the same.
- Only market what you are allowed to do - If you are not an AFA, do not make any statements that imply (or create the impression) you can do anything that can legally only be done by an AFA. Your marketing, be it via business cards, websites etc, must unambiguously promote only those services you can provide.
- KISS - Remember the old principle, Keep It Simple Stupid? There is no need to prove you know bigger words than your client, or that you can produce long documents. In doing so you run the risk of being non-compliant and are likely not acting in the best interests of your client. If you are an AFA, tailor your Secondary Disclosure Statement to your client and make it simple and easy for your client to understand.
- Be absolutely truthful to the FMA - If you are an AFA, telling the FMA at Annual Confirmation time your ABS is ‘maintained regularly’ should not be code for ‘I don’t have time to do it but I will make sure it is up-to-date when I get a letter from the FMA saying they are visiting’. Do not tell the FMA your ABS is up-to-date and being maintained if it isn’t. But MAKE SURE IT IS!
- ‘I’ve been in the business for 20 years and have seen it all’ is not research! You need to be able to justify your recommendations – both to the client when presenting them, and potentially to a complaints body or a judge in five years time.
- Complaints are an opportunity to improve your business – Happy satisfied clients are a free and effective marketing tool. Use any complaint from your clients as an excuse to look at your business practice and see how you could do things better (as well as complying with your DRS requirements of course!).
- Know what you do, and keep up-to-date - ‘Competence, knowledge, and skill’: three words all advisers need to remember. Make sure your training and CPD are relevant to what you do now and what you want to do in the future. Keep a record so you can prove it.
Adopting these seven habits will help keep an adviser on the right side of compliance – where you want to be. Strategi has also observed that advisers who have adopted these habits, are leveraging their marketing off their compliance to gain a competitive edge. In the words of one adviser,
“Operating in a regulated environment does not come without costs and involves upfront and ongoing expenditure. However, we have made a conscious decision to see this expenditure as an investment in maintaining profitability, growing the value of our business, and helping to maintain relationships with our clients. We have found in doing so we are one step ahead of our competition.”
