“Develop the strength to do bold things, not the strength to suffer”
— Niccolo Machiavelli
We live in ‘interesting times’.
Australian Financial Services Licensees are generally well-prepared for managing risks, crises and uncertainties , but the current challenges are more profound, and more profoundly challenging, than FDS revisions and regulatory changes.
That said, these challenges are, from necessity, causing Licensees to reconsider how they operate and how the right technology, properly deployed, can help them better navigate change.
Although our Coders routinely (and obsessively) practice social-distancing, we have no expertise in immunology, epidemiology or virology, so we are woefully ill-equipped to comment on COVID-19. In fact, our profound level of ignorance only allows us to assert expertise on these matters on social media platforms like twitter.
What we do know well, though, is the complex regulatory environment in which Licensees and advisers work and the inexorable pressures of increasing regulatory attention, shrinking margins and burgeoning compliance costs. We also appreciate that technology can relieve these pressures.
You’re grappling with significant change so we want to highlight how a well-designed regtech solution – like OpenAFSL – can help you to adapt and evolve.
“the future is already here — it’s just not very evenly distributed.”
— William Gibson
Traditional monitoring and supervision regimes were designed to control Distribution and mitigate distribution risks. While they may have inadvertently provided the means to provide rewards, reassurance and discipline, they were largely ineffective in either promoting professionalism or improving the client experience. Instead, often compromised by internal and structural conflicts, they promoted homogeneity, conformity and bureaucracy.
Process may be important but intent and outcome are far more relevant.
OpenAFSL approaches monitoring and supervision differently by applying behavioural insights made and applying equal weight to construal elements (environmental and structural considerations) as preferences (ethics and conduct).
Our contextual review, unlike the mechanistic process routinely followed by most Licensees, focuses on the client experience and creates a formal demarcation between formal and substantive compliance issues. This doesn’t slow the review process, but it does ensure that Best Interest and related duties are given priority.
In fact, by abandoning the “safe harbour” checklist-led approach of institutional licensees, we’re better placed to consider matters in context and therefore better differentiate between intent, process and outcome.
- The Advice Assurance Report has been redesigned to streamline content and highlight key take-outs. You can also choose to group observations by file instead of grouping them by issue. You can even do both or vary your approach according to the recipient’s preferences and learning style.
- To help advisers improve their advice processes, or increase the quality of their advice, each report will now contain a range of practical steps the adviser can take to improve their results.
- The standard report now includes trend analysis and a comparison to the industry standard derived from our sample of over 7,500 files reviewed.
- To assist advisers contextualise their results, their report will now identify whether they sit in the top 40% of advisers, the top 30%, the top 20%, the top 10% or the top 5% of our sample.
- If you’re interested in understanding your top issues, or the most common issues in a particular period, you can now generate these reports simply. We’ll also now highlight the total number of observations made grouped by consequence and impact.
- If you’re demonstrating behaviours and practices that exceed legal requirements and industry standards, these will be prominently highlighted in the report as a congratulatory note to the adviser.
- The FASEA Standards have been integrated into our methodology in a manner consistent with our approach to Best Interests.
“Results tend to be distributed in a ‘bell-curve’ but it’s important to correct two misrepresentations commonly made about the methodology.
1. We don’t force a ‘5’ result. A 5 reflects nothing more than satisfying minimum legal requirements (compliance). Quality advice deserves, and secures, higher scores.
2. Everyone does not get a ‘5’. Account Managers’ assertions aside, the data shows that only 11.6% of advisers scored 5 exactly. ”
— Sean Graham, Managing Director
- Separate issues – with the same remediation action – can be grouped and processed as a single item. Better yet, if a single group item is incomplete, it can be easily separated from the group and the remained closed.
- Remediation actions can be sent to advisers directly and, as they execute the required steps, OpenAFSL will record, highlight and escalate their activity.
- We’ve made it easier to identify the cause and origin of the issues to be remediated. You’ll also soon be able to separate root causes from direct consequences and remediate them differently.
In the last update, we focused on the Risk and Obligation Register. Since that release, it’s been refreshed and improved. In addition to the “face lift”, you can now:
- Coaching can now be delivered (and recorded at) either a Business or Adviser level. So debriefs, education and ad hoc interactions can be effectively recorded, managed and reported.
- Recruiting and appointment steps (consistent with regulatory requirements) have been coded into OpenAFSL to operationalise these requirements. Documents can be updated and validated before the prospect can be appointed.
- Provisional Advisers, and the details of their supervision, can be managed through OpenAFSL.
- Training and coaching can be tested (or confirmed) through surveys issued through, and retained by, OpenAFSL.
- allocate risks and obligations to an associated business or outsourced service provider;
- interrogate the Review and Attestation tab to better understand what’s occurred over time;
- record more detail about “Who Manages the Control”; and
- Attach documents to the Register, actions or controls.
If you exclude the advice review module from your system, you can obtain access to a reg-tech platform built by, and supported by, compliance experts.
For a relatively low licensing fee (based on user numbers) you’ll secure the data, systems, training and support the Regulators expect you already have.
Pricing is flexible and customised to your needs. From as little as $240 per user per month you can access a compliance platform that can free you from the burden of compliance.
Contact me if you have any questions or want to arrange a demonstration.