Consumer Duty is all about putting the customers first – in what they are being recommended, in the process of writing the report – in basically every stage of the advice journey. As a financial administrator, we are an important part of this process, says Jodie Hall, financial administrator, Para-Sols.
We all need to make sure that as a team we are considering the client and making them the focus of what we are doing. A recommendation and a suitability report aren’t one size fits all. All client situations should be considered and put at the forefront of the decision making as they are the ones we are doing this for, aren’t they? Below, we look at some of the key areas where a financial administrator can really add value for their firm and for the end client:
Culture
Consumer Duty is a very different piece of regulation in the sense that it’s almost intangible. It’s outcome-based rather than a prescriptive ‘how-to’. Everything starts with a firm’s culture and behaviour, meaning that everyone involved in the advice process will play a part in ensuring that compliance with consumer duty is achieved – including administrators. Financial administrators may not get involved in the recommendations being made, but we should always be looking for things the adviser might have missed that could stop them from achieving the best outcomes for the end client.
Clear & Concise
Everything we administrators and paraplanners provide to the advisers, (which in turn is provided to clients) needs to be presented in a clear and concise way, complementing the consumer understanding outcome. This means that anything we receive from providers needs to be translated and simplified into language that the clients will understand, because the information is not always straightforward, even for those of us with experience!
Whether it’s putting charges into a table so that they are presented in a clear way for clients rather than having a list of words or calculations that they would have to try and figure out; or highlighting the key features of the plan so that they don’t have to go digging to find out if their plan offers the retirement options they desire, we can ensure that the information is presented in the most consumer-friendly manner.
Understanding gibberish
Financial administrators often need to call up providers to find out information not included in documents, then provide the key points in a simple format for the paraplanners to write reports concisely to then be presented to the client.
Sometimes phone calls to providers can take a long time as they will try to explain things in a super complex way (after a lot of hold time), and we must try and make sense of this to then translate it in a way that the client will understand. It should also make sense as a stand-alone point in the data gathering process. This could be as simple as considering presenting the information in different ways depending on the client in question. This is also an important part of Consumer Duty – treating each client as an individual and making sure they are receiving communications in a way that is best for them to reach a complete understanding of the products recommended. Administrators really are best placed to help with this!
We’re detectives too…
At the data gathering stage, administrators always have to make sure that we have got our eyes peeled for certain plan features such as a guaranteed annuity rate or enhanced tax-free cash, and then highlighting this to the adviser.
This can often change the advice given to the client and can be detailed in the report which shows that the adviser is doing what is best for the client. For example, if a client has 11 plans and the advice is to consolidate them all into one plan with lower charges, rather than having all of the plans individually, this might be the best outcome for the client, until the administration team find out that they have 53% tax-free cash on one plan which will be lost if it’s included in the consolidation. So, it’s super important for administrators to be on the lookout for details like this to make sure the client is receiving the best possible advice for their specific circumstances. Evidence everything.
If it’s not on file, it didn’t happen
Data gathering is also a great tool for being able to evidence that you are doing right by your customers. The data gathering stage can be key for this as even though you don’t show every detail of the plan information in the report, everything we need to know about the plan, relevant to the recommended advice, will be shown in the data gathering.
Highlighting all of the plan’s features, latest valuations and charges; even information that isn’t always included in all providers’ documents should be included in detail. Administrators have to make sure that we are filling these out as effectively as possible to make the information useful to everyone involved in the process. Then you have your evidence on file, hidden behind the scenes without having to squeeze every last word of it into the report itself. Again, this is a key part of compliance with Consumer Duty – everything has to be evidenced in the client file. If the FCA wanted to question why a specific decision was made, you should have the written evidence to back that up, even meeting notes, notes from provider calls etc. Everything is important for the file. We know a lot of advisers like to keep things in their heads – it’s our job to ensure that everything is written down for the file.
No question is a silly question
Financial administrators also have to make sure we are asking questions if things don’t make sense. If you can’t see why the information is needed, you should turn to the paraplanner and ask them to help, so that you understand. And if there are no explanations provided by the adviser or in meeting notes, etc., go back to them and make sure you understand why this is being recommended to this client. This can help identify when things aren’t being explained clearly – if we administrators can’t understand it, the chances are the client won’t either.
For example, if the old plan appears to be performing better than the new one, is there enough justification on file to explain why they would want to switch? Raising questions like this with the paraplanner or adviser will help them build a really strong file and, ultimately, help ensure clients receive the best possible service, including value for money.
A final note
A financial administrator is at the front lines of the advice journey. Usually, we are dealing with providers and clients directly, chasing information and gathering data in order to help the paraplanner and adviser.
This means that the administrator has a very important part to play in ensuring Consumer Duty regulation is embedded into our process and practice, as what we do is the backbone of the recommendations given by the firm.
We are integral to the outcomes of Consumer Understanding and Consumer Support and we can make a difference in making sure that any communication we prepare or data provided is correct, clear and has the end client in mind. We are the voice of the client in this process, so anything we are not sure about in the final recommendation may also not be clear for the client, so always make sure you speak up.
We don’t want the client to just look at a list of figures, valuations and charges. At some point they are going to read so many that they stop taking it in properly, and it doesn’t make sense. The client doesn’t just need to be kept in mind when deciding the product that they are being recommended. They need to be kept in mind when the report is being written too. And, actually, at every stage of the process. It’s our duty, after all!
