Record-keeping obligations in Financial Planning | How to comply

Record-keeping obligations in financial planning: is your business ready?

As a result of the Royal Commission report, FASEA has introduced a Code of Ethics for financial planners that includes extra record-keeping obligations.

However, the chances are you’re already struggling to deal with all the day-to-day administration, consultations and reporting. Adding the burden of yet more documentation to meet compliance may seem like just too much.  

 How can you comply with the new record-keeping obligations without drowning your business under the increased workload? In this article, we’ll help you understand the new record-keeping requirements and find out how improving your technology will help...

New Code of Ethics for financial advisors

The recent Royal Commission report saw a shakeup of the entire financial planning industry. One of the key outcomes has been to put steps in place that “raise the education, training and ethical standards of licensed financial advisers in Australia”. 

The Financial Adviser Standards and Ethics Authority (FASEA) is responsible for making those outcomes happen. As part of this mandate, they’ve created a compulsory Code of Ethics that all financial advisers need to adhere to. This Code is made up of five values and twelve standards.

The eighth standard refers to your record-keeping obligations as a financial planner.

What is FASEA Standard 8?

FASEA Standard 8 aims to improve financial planners’ record-keeping. It requires that you “ensure that your records of clients, including former clients, are kept in a form that is complete and accurate.” The FASEA explanatory statement further clarifies that you need to keep records of all the advice and services you provide. 

That means more than simply recording a bare minimum of personal information for each client. It means keeping and filing every piece of correspondence between you and your client. This includes not just physical documents, but also communications like emails, voice recordings or notes you’ve taken during meetings.

Keeping clear, accurate and complete records is also key to proving you’ve met the other standards in the Code. For example, it provides evidence that:

  • you’ve acted with integrity and in the best interest of your client (Standard 2)
  • your client has understood the advice and recommendations you’ve given them (Standard 5)
  • you’ve taken all reasonable steps to give advice that’s accurate and in your client’s best interest (Standard 9)

Your record-keeping obligations as a financial adviser

You’re now required to keep a lot of documentation. So, if you’re like many financial advisers, you’ll need to completely overhaul your record-keeping systems.

Just some of the information you now need to document includes details of each client’s:

  • current circumstances
  • broader, long-term needs and likely circumstances
  • family members’ broader, long-term needs and likely circumstances

PLUS you also need to include other information that may come from meetings with your client. For example, you may need to document their ability to tolerate risk, their attitude to money, and your analysis of their needs and goals.

As you can see, you’ll need to store a large quantity of information for each client. And the standard also requires you to keep all records securely in a way that meets Australian Privacy Principles.

Most of the industry is currently focused on ensuring their historical records meet the new standards. 

But that’s only half of the picture. 

Fixing historical records is a time-consuming process, but – if you do it right – it’ll only be a one-time job. You should use this change in the requirements to find a cost-effective process to manage your record-keeping going forward.

Of course, keying data in manually after each interaction with your client is inefficient and costly. Automating the process of collecting and recording all that data will save you time, effort and money.

How Umlaut can help you to comply with FASEA Standard 8

Umlaut has extensive experience in helping financial advisors and planners to improve their data management. We have a range of products and services specifically designed to help.

Digitising historical records

Our Xplan Connect service is designed to get your historical records in order, no matter what state they’re currently in. Whether they’re paper records stored in the spare room or digital records scattered across multiple hard drives, we can create order from your chaos.

We take all your data, scan in the paperwork with our high-speed scanner, then sort and file everything to bring it into your Xplan System of Record. We even identify any anomalies or gaps in your information, so you can take action to address the issues.

Automation going forward

Once your data is digitised and centralised, two of our products can also help you to meet your FASEA record-keeping obligations going forward.

AdvisorForms takes the hassle out of dealing with manual forms. Our customisable online forms let your client enter their information directly, then automatically sync the data with your System of Record. No more time-consuming, error-prone manual data entry; and no scanning, printing, posting and chasing up forms. AdvisorForms not only keeps your data accurate, but it also saves your firm hours (and dollars).

Xplan Drive is our simple, secure, compliant financial document management system. It simplifies storing all the information that won’t fit neatly into your System of Record – things like voice memos, meeting minutes or handwritten notes. And it maps each item to the relevant client, making the information just as simple to retrieve.

Make your FASEA compliance simple with technology

Your obligation to keep complete, accurate records for each client and every interaction with them can potentially be a millstone around your business’s neck. However, the right technology can easily digitise and centralise your old records, and then make ongoing data entry and retrieval quick and simple. 

As a result, you’ll save time, effort and money, making your business far more efficient and competitive.

See how we can help.

Free Guide: How to reduce your business costs by 43.8%

Free Guide: How to reduce your business costs by 43.8%

Download this free guide for your step-by-step plan to:

  • Reduce admin costs.
  • Speed up client signatures and approvals.
  • Automate manual workflows.
  • Reduce manual data entry.