Adviser Reviews: You can be the best
One of the most surprising insights from completing hundreds of adviser reviews, is the relatively small number of advisers who are interested in moving 'beyond compliance'.
In some respects, it may not be that surprising given the high percentage of advisers that seem unable to meet the minimum standards compliance requires. Others simply lack the energy, incentives or insights necessary to move forward in a hostile and uncertain environment.
The challenge is compounded by risk. Some licensees use compliance results as part of a balanced scorecard or as the basis for bonuses and promotion. So improving the quality of advice, and getting a better review result, has additional benefits.
Assured Support's risk and conduct-based methodology expects compliance and rewards quality, so to help make your journey a little easier, we'll share seven steps you should take to achieve better review results.
Before you dismiss this suggestion and skip ahead to tip 2, take a moment to consider what we're recommending.
We're frequently asked for suggestions, advice and tips about what good advisers are doing, what ASIC expects and the future of advice, but our tips (however practical or effective) are seldom implemented.
Improvement requires deliberation, commitment, consideration and effort.
If you've read Philip E Tetlock's "Expert Political Judgment: How Good Is It? How Can We Know?", you'll understand that expertise, and the confidence it engenders, often reduces the expert's accuracy or success.
Doing what you've always done, in the same way you've always done it, will guarantee you the same results.
If you want to get better results, start by talking with your support staff, compliance team and para-planners. Ask them to identify your opportunities for improvement.
The broader the consultation, and the more diverse the views, the better.
As a useful exercise, provide one of your support staff with your favourite SoA and ask them to read it and then explain your recommendation to you. Their honest feedback will be invaluable.
3. Embrace sampling
Advisers seeking 'quick wins' often focus on the algorithms, assumptions and scaling on which any comparative analytic tool relies. Even if you're passionately interested in linear, quadratic and exponential measurement, it's unlikely to benefit you in any real fashion.
Embrace the fact that our methodology is optimised for review samples of 4-5 client files. Results aren't averaged, but the larger the review sample, the less likely you are to be disadvantaged by an atypical result.
4. Read your last report
Read your last compliance report, and review the notes you made from the debrief.
What coaching tips did the reviewer offer? What remedial options were suggested? Were identified failures caused by a single or related issue?
If the report didn't identify any failures or issues, ask the reviewer what practical steps you can implement to improve your result. Visit assuredsupport.com.au to understand what ASIC and Compliance experts are focusing on in the next 12 months.
5. Ask for more granularity
Depending on your referral source, your review might use a more mainstream approach or consider less relevant matters.
If you're a licensee that would appreciate more differentiation, talk to us about whether a more detailed methodology is available to you.
6. Customisation and context
Despite the popular obsession with templates, disclosures, disclaimers and length, the real measure of quality advice is its comprehensibility. Advice that Courts/Regulators believe clients can't understand is worse than simply counter-productive; it's hazardous to you and your licensee.
Is your recommendation a highly-personalised, well-considered and clearly explained strategy for satisfying your clients' goals, needs and objectives (or is it a generic product sale designed for a generic client)?
- clearly explain what aspects of your recommendation are in your client's interest?
- explicitly link the scope of the advice with the client's relevant personal circumstances, the subject matter of the advice sought and the strategic and financial product advice?
- Present specific, measurable and prioritised objectives?
- Demonstrate that the client's interests were your priority;
- Show that product replacement was only considered AFTER you identified the client's needs and researched their current arrangements;
- Properly responded to the complexity of your client's needs and circumstances and their particular challenges and disadvantages (low levels of financial or non-english speaking background).
- Highlight the additional steps you took to provide the advice/services sought;
- Minimise the use of disclaimers and qualifications;
- Show that you formally considered your education, competency and experience before providing advice; and
- Demonstrate that their situation has been, or will be, improved if they follow your advice;
7. Implementation and ongoing service
It's tempting to reduce this to a focus on fees, but 'quality' is a broader issue. We're looking for indications that you acted "efficiently, honestly and fairly" and that you delivered on what was promised.
Ideally, we'd like to see that you've over-delivered by reducing portfolio risk, delivering more frequent reviews or reducing the fees paid by your client.