Shift to remote offices could aid FASEA compliance

The remote technology many advisers have adopted during the COVID-19 pandemic could help to ensure better compliance with the FASEA standards into the future, a technical expert has said.

In a recent episode of The ifa Show podcast, BT head of financial literacy and advocacy Bryan Ashenden said the ability to better document virtual client meetings could help advisers’ compliance with Standards 4 and 5 around informed consent and understanding of the advice being given.

“If we think back historically, the way we’ve engaged with clients is sitting across from them – the papers will go across the table and after the meeting the adviser might be making a file note of the discussion that will say I talked about this, I pointed these things out, this is how they reacted,” Mr Ashenden said.

“A lot of advisers during the last couple of months have been meeting with clients virtually, so provided you get the client’s consent, you can actually record those meetings. That gives you the extra bit because no longer is it just a file note that’s a he said, she said type arrangement, you’ve got the video there showing how people are reacting to the conversation. 

“When you look at things like Standard 4 and ‘do I have your consent to go and do these things’, it’s an extra proof point you have in play.”

Given the more rigorous compliance standards offered by the ability to record client meetings, Mr Ashenden suggested advisers consider a similar practice even if they were planning to transition back to conducting meetings in person.

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“Part of the challenge going forward might actually be when we start going back and we’re meeting with clients across the table – do we want to start introducing some form of recording of those conversations, whether it’s just audio or video as well?” he said.

“That’s certainly a way to help with informed consent, because informed consent is really about how do I have comfort that you just understood what I said. That comes up under Standard 5 as well, so having that understanding is really important.”

Mr Ashenden said advisers should view the FASEA code of ethics as a document that was trying to shore up their legal protections, rather than creating more of a compliance burden.

“The code isn’t necessarily about something that’s trying to create more work and more issues for people and I think Standard 5 is a great example,” he said.

“If there was going to be a complaint made, what’s the first thing the client is going to say? It will be ‘I didn’t understand the advice’. Standard 5 is trying to protect the adviser because it’s really trying to make sure you’re in a position that that argument could not come up in the future. 

“Get yourself comfortable through whatever mechanism it is to make sure you believe the client understands the advice, you’ve got proof the client is giving you that informed consent to go and act, and all those things should help protect you as an adviser.”

Shift to remote offices could aid FASEA compliance
Bryan Ashenden
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