Compliance File Check Reviews – Top 5 Common Trends – the difference between achieving Initial Pass/Fail Grades.

As part of our service to you I want to keep you updated regularly with the most `common trends` when reviewing client files. This is so we can continue with our ongoing support, guidance and training and help you maintain compliance at all times. So here are the top five common trends:

Number 1 – No evidence

No evidence of the `read and understood` returned email from clients in respect of the following documents you have issued to your clients:

• Customer Declaration
• Disclosure Document
• Replacement Policy Questionnaire

It is really important that you evidence on your clients’ file that they have `read and understood` these documents by obtaining an email confirmation from them and attaching it to their file on the Key.In  line with the new General Data Protection Regulation (GDPR), one of the key requirements is how you use your client`s personal information and how you use it to contact them for future communications. You will also have to ask your client`s permission to store and process their data and your clients will be asked to make a choice with their preferences. You will also need to ensure that when you send and receive personal data you are complying with the new Regulation, which will be effective from 25th May 2018.

GDPR is changing how you get the documentation to your client and how you receive it back for further information on GDPR please visit our GDPR Hub on the members website here.

Solution – Client Portal

We are pleased to confirm that the Key will be fully compliant with the new Regulation and includes a Client Portal, which will allow you to securely send and receive documents with your clients.  Please see the User Guide to Client Portal on our members website here.  This is a fantastic way for you to send and receive documentation to your client by giving them a link to `The Key` via a client portal. I must emphasise that your clients will not have access to your `Key’ they purely have access to the documents you decide to send them and the facility to add documents and upload them which you will receive securely via the Client Portal. Please take the opportunity to understand how this works, it is a great way for you to comply with the new GDPR requirements. Should you require further training/information please let us know and we will be happy to guide and assist you.

Number 2 – Fact Find – Soft Facts

It does make the file reviewer’s job much more difficult if some key evidence is hard to find because the key evidence is not there in the clients file.

We often see files with inadequate soft facts. Following such a file review, advisers often say something like: “Oh yes. I discussed that with the client and he confirmed that ……….” (the information is known to you but is not noted) so please help us to help you by writing down as many soft facts on your clients file as possible.

Solution

1. Why not send your fact find to your client via the Client Portal?Ask your client to complete the fact find/ income expenditure/ etc. – they complete the document and it then appears on your Key! This is great opportunity for you to then review/have a conversation about the information they have completed and add any relevant notes or if you prefer to complete the fact find yourself as normal.
2. Please add any soft facts to your fact find in the notes section. Please tell us a story so that we can understand your clients file. Short, relevant notes are ideal but we would never object to complete chapter and verse!

This really can make a difference between an initial Pass or an initial Fail on your client file review. It will also prevent calls to yourself for clarification purposes and will assist us and you greatly if we can start to see more notes included in your fact find.

Number 3 – Research

We often see no evidence of research on client`s files where the KFI/ESIS/Protection Illustration has been provided directly from the lender/provider website. Nothing wrong with provider/lender KFI/ESIS/Illustration but you must demonstrate on your file how you arrived at your recommendation by attaching the relevant research (Comparison Report).

Solution

Please use your sourcing tools for all products and download your research to show the comparison between other providers/lenders products.  Please remember to relabel your document if using integration.

Number 4 – Suitability reports

We also see `templates `attached to the Key where no personalisation has been built into the report. Please remember that Suitability reports must specify the advice given and how that advice meets the preferences, objectives and other characteristics of the client.

We know that we must inform clients or potential clients, clearly and simply, that the reason for assessing suitability is to enable you to act in the client’s best interest and that the product you have recommended is the most suitable for your client.

Solution

Please take advantage of the suitability letter template from the Key. However please only use the paragraphs that are relevant and spend more time on your ` personal recommendation` and the reasons why, so that the client and ourselves can see clearly; why that provider and why that product etc. If there is only one reason for your recommendation then – one reason is enough! – Short, relevant and clear.

Number 5 –  Income Protection – No evidence of employment

We do see a lot of cases where no evidence of employment has been confirmed regarding IP policies. We do require evidence of employment to confirm the clients’ level of income to avoid any over insurance.

Solution

A simple bank statement OR latest payslip showing level of income will suffice.

Or

Copy of employment contract

—–

For those who are self employed there are various options: Latest tax returns OR Computations with tax overviews OR tax calculations will suffice.

Please remember with budget plans – maximum £1,000 per month – You will STILL require evidence of employment.

As part of our service to you I will keep you updated regularly with the most` common trends` when reviewing client files so that we can continue with our ongoing support, guidance and training to help you maintain `compliance` at all times.