Goals based advice can be as complex or straightforward as you decide to make it. On one hand there some simple common-sense elements that you must adhere to for compliance purposes and also to make sure you are doing the right thing for your client (client best interest duty). On the other extreme, some industry experts would have you believe the discussion around client goals should be a complicated and time-consuming hurdle that any potential client must navigate to be allowed into the inner sanctum of the advice circle.
While some practices have made goals a key element of their service offering, most practices haven’t yet adopted this approach.
ASIC Requirements
Unsurprisingly, ASIC have made it quite clear that a jargon laden ‘client goal’, retro fitted into a statement of advice from a dropdown menu is no longer acceptable. This was always a lazy, box ticking exercise that infiltrated our industry in the guise of efficiency (and more likely compliance) and has quite rightly been called out in the search for a better solution.
Fortunately ASIC have provided some direction for us to follow and at AstuteWheel we have built our Goals Based Advice Tool to not only adhere to the compliance requirements but also to be client centric and valuable to the client and the adviser.
Know Your Client – ASIC wants to see advisers gather personal and financial information from their clients and this must include their stated goals captured in the ‘client’s voice’. However, research that we have conducted and our own experience has shown that people generally struggle to articulate their goals when given a blank page to begin with. Consequently, some level of prompting can be helpful, either through discussion or by providing a list of general goals that a client can use as a starting point and then add in their own “what it means to them” words (client’s voice).
ASIC then wants to see evidence that the adviser has discussed the subject matter of these goals.
Goals Questionnaire
So, we created a Goals Questionnaire that provides a list of short goal prompts to assist them in the process. Which list of prompts appears depends on things like the client’s age and whether they are working or retired.
The questionnaire then asks them to expand on the goal in their own words thereby capturing the client’s voice and also asks the client to choose a time horizon and set a priority for each goal.
AstuteWheel provides the Goals Questionnaire as part of the Online Fact Find used for new clients but it is also available as a stand-alone questionnaire that can be sent to existing clients to re-set their goals as part of their annual review; or for disengaged clients as a way of re-engaging them into your business as a fee paying client.
Goals Based Advice Tool
To comply with ASIC ‘s requirement to provide evidence that the adviser has discussed the goals with the client, we built a Goals Based Advice Tool that automatically captures the information from the Goals Questionnaire and allows for the evidence of this discussion that the adviser and client have and outcomes to be captured.
The tool provides the following functionality to achieve ASIC’s requirements:
- The client goals is re-stated as a SMART (Specific, Measurable, Achievable, Realistic and Time bound) goal to show evidence of the discussion and that the goals have been agreed
- New goals can be added to show evidence of the adviser looking at the client’s broader circumstances to identify other ways they can improve the client’s circumstances
- Goals can be archived if it is agreed they are not realistic or are in conflict with other goals (another ASIC requirement)
- The list of goals is rated in terms of urgency to ensure they are addressed in the correct order for the client
- Adviser notes are added to each goal to provide clarity and show further evidence of the depth of the discussion
- Each goal is then tracked and progress is reported
- Achieved goals are archived.
The Goals Based Advice Tool can then be used at each review meeting to become the basis of a goals-based discussion, existing goals can be re-visited and tweaked or changes made in the financial plan to get the client back on track.
Goals that are achieved or discontinued can be archived, and new goals can be added.
Goals Report
The finalised goals are now available to be generated into a Goals Report for the client to receive as a valuable part of the service offering (valuable to the adviser too) and as an audit trail document to provide evidence of your compliance in this regard.
Goals in other parts of the process
The relevant information is also used in downstream tools such as the Scope & Scale of Advice wizard, the Letter of Engagement, the Strategy Document and the Statement of Advice. This allows the original client goals to be linked to every aspect of the advice process.
The Goals Based Advice Tool has been designed as a visual and interactive experience that can be conducted through a screen-shared meeting just as easily as a physical meeting in your office.
If you want to find out more then register for a webinar and receive a 7 day free trial by clicking on the link below:
https://www.astutewheel.com.au/book-webinar/
Hans Egger is Managing Director of AstuteWheel
https://www.astutewheel.com.au/
