The Verve Group’s Jo Campbell tells how the team has gone about reviewing their suitability report templates in the light of the Consumer Duty rules and why they are willing to share those templates with you.
Now Consumer Duty is live and somewhat kicking, I wanted to address one of the biggest parts of the movement, which is consumer understanding.
We’ve had a lot of our firms contact us for our thoughts on this and the impact this will have on their reports, client communications and to ask what we think about their firm’s compliance offerings and of course to find out how we are approaching it through our services. So I’m going to tell you.
Cathi Harrison and I genuinely believe in free trade and that we will only progress as an industry if we knowledge share and discuss best practice
Worryingly, my general findings from the examples I’ve seen from some compliance and advice firms is that they have adapted their reports and they’re now much shorter, which is great, but short isn’t always better
Condensing a 40-page report into a 10-page report by making the margins smaller or reducing text size and taking out some of the generic information, generally isn’t going to (pun intended) cut it, I’m afraid. So if you take nothing else from this article, please take this – don’t judge a book by its cover or a suitability report by its page numbers.
Of course, our internal suitability report templates have also been given a makeover too, and as a company that produces templates, award-winning paraplanning reports, compliance and various forms of communication through advisers to their end clients, I feel well placed to discuss our stance on client comms and consumer understanding. But, of course, as with nearly all of these things, this is my opinion only and there are many interpretations of the rules.
So when reviewing our reports, instead of focusing solely on length (though it was a consideration) we’ve focused on how to make all of the salient information really pop for the client to help them digest and understand it, without the message being diluted by all the other bits of data provided in a suitability report
Our conclusion was that all of that information didn’t NEED to be in a report. Yes, you need to analyse the suitability of a ceding scheme and yes you need to do research on a provider and explain why you’ve chosen them. However, all the client needs to know is that you’ve done this work (kept it on file) and that your advice is suitable for them based on their objectives.
So, how does the report look now?
The result of this is that we’ve massively reduced our client-facing reports and instead focus on making sure that our advice files are more robust and full of relevant information. Meaning you can share with the client if you feel it necessary – but it does not all get stuffed into the report, in order to bamboozle, distract or frankly, bore the client into a data-driven coma.
For example, tell your client in the report that the cashflow supports your advice to meet their objective, but don’t put the actual cashflow in there. Keep it separately so they’re not scrolling over 5 pages and 100 graphs including a monte carlo scenario to get to the relevant information which is – CAN I RETIRE NOW OR NOT?!
Therefore, my one piece of advice for an SR is this. What are the client’s objectives? What are they trying to achieve? Does your advice achieve those objectives? Yes? Then write about that. Link all pieces of advice back to those objectives, make them relevant (even if it’s only a few sentences) and keep all the irrelevant stuff out of their direct eye line and on the file instead.
Remember that a suitability report is judged on how well it’s read, not how well it’s written.
Keep all of the periphrasis and circumlocutory speech out of there (see we all know big words and can impress people with our writing, but has that enhanced your reading experience any more than the bit where I used the word “stuff” earlier?).
Our reports were already packed full of tables, colours, icons and digital enhancements to really help understanding, but the main focus will always just be on ensuring that it’s relevant to the client and they understand that your advice will help them achieve what they want to achieve. That’s our business isn’t it really? That’s what it all comes down to.
So as always, use tables, graphs, colours, use Word Editor, increase passive sentences, use smaller words and sentences, let your granny read it and understand it and as long as it’s relevant, I’m sure you’re nailing the consumer understanding part of Consumer Duty.
The paraplanning team at Verve have a new sample report that they’re more than happy to share with others, just drop them a line with your request to [email protected].
[Main image: pierre-bamin-ltjzTfhpCI-unsplash]
