B&V provide comprehensive training on the advice process to help Authorised Representatives (AR’s) become efficient in their new role as an adviser.
There are three key areas of training.
- The appointment process
- Advice documents
Ongoing client management
1. THE APPOINTMENT PROCESS
The tools required to obtain all relevant information.
The following forms or questionnaires are required to be completed by the AR if providing advice to a client beyond SMSF establishment. i.e. Superannuation strategies
- Financial Assessment Questionnaire When providing financial advice to a client it is important that the AR has a clear understanding of the client’s personal situation. This is to ensure that the advice provided, is in line with the client’s needs and objectives.
Risk profile for investment strategy
Along with information from the Financial Assessment Questionnaire and general discussions with the client, the risk profile helps an adviser to establish what types of investments would be suitable for the client. It is based on the following:
- Attitude toward investing
- Previous investment experience
- Time frame for investing; and
Authorisation to obtain further information
Certain research may be required to be completed on a client’s existing investment’s, superannuation and/or personal risk insurance in order gather accurate information on their current situation. A client will sign the authority so the adviser can obtain information from a third party on their behalf.
Financial Services Guide
The Financial Services Guide is a document that is required to be given to a client by an AR before written or verbal advice is given. This document should encompass the following:
- Who the AR is licensed through
- The AR’s experience and qualifications
- Services that can be provided under the license as an AR
- Fees applicable; and
- Dispute resolutions
2. ADVICE DOCUMENTS
The types of Advice documents that can be provided to a client
Statement of Advice (SOA)
The SOA is an advice document, provided to the client containing recommendations.
The information should be based on all previous information that has been gathered from meetings, questionnaires, risk profile and other research.
The SOA should be set out in a manner that is clear and informative. The information must be accurate as this is the advice that a client will act on.
To make sure the client understands the advice and is provided with an analysis of their current situation the SOA should contain:
- An Executive Summary
- Current Financial Position
- Goals and Objectives of the client
- New Recommendations
- Outcomes of the Recommended Strategy
- Fees applicable; and
No Advice Confirmation – Execution Only
If a client has approached the AR in relation to proving them with a particular service but has clearly stated that they do not require advice, the AR must provide them with a document that sets out the terms of engagement. That is the client would like to pay for a particular service to be administered by the AR and does not require any advice.
Two examples of this could be the establishment of a SMSF or a certain amount or type of Personal Risk Insurance.
3. ONGOING CLIENT MANAGEMENT
Client file notes
Client file notes should be made regularly. They form the basis of ongoing advice and should be referred to frequently. They are not only important for providing further supporting information for future advice but crucial for compliance purposes.
Whenever a discussion takes place with a client and the topic is based on current or potential future advice, a file note should be made.
Clients may require additional advice in the future. More often than not, when a client seeks advice, they will require an analysis of some sort. If this is the case, a document must be provided with recommendations. AR’s cannot just purely rely on previous advice documents; they should not only provide new recommendations but also address issues previously advised.
Portfolio management (in conjunction with B&V)
If ongoing investment advice and management is required, clients should have access at all times to view their portfolios.
An administration system should be utilised for this purpose and provide:
- Up to date valuations
- Trading transactions
- Asset class summary; and
Realised and Un-realised Capital Gains
Ongoing client reviews
Ongoing and regular reviews should be provided to the client. Within the review, an AR should establish what level of service is required by the client.
Types of services may include:
- A Comprehensive quarterly, half yearly or annual review
- Informed of new opportunities
Portfolio management including:
1. Annual strategy reviews
2. Advice on corporate actions
3. Regular advice on buys and sells
Due to recent changes in legislation in relation to FOFA, AR’s may be required to have clients sign a formal review agreement.