The first step before adding new technology should be to complete a stocktake of what tech a practice already has, as a new solution the business may desire might already be in place.
In a follow-up webinar to address unanswered questions from a session at the FAAA Congress in November 2024, designed to illustrate what advisers and advice practices can do now to streamline the delivery of advice and simplify documentation, without waiting for the government to act.
Retrac Business Solutions director Travis Carter recommended advice businesses looking into technology options have a look to see what they already have in their tech stack.
“You might actually have something that can do the solution before going out [to find new tech],” Carter said.
New AI services are a common example, now that Microsoft Office has included its AI Copilot feature in most subscription offerings.
Tangelo Advice Consulting principal consultant Conrad Travers said one of the questions he always asks is whether a business has maximised what they already have.
“Have you done the training? Do you know what it’s capable of? Not saying it is the perfect solution, but you wouldn’t throw away something to go to something worse,” Travers said.
“For example, if you did an integration into something like Salesforce and that didn’t work for your business, you could end up in a worse scenario. I’ve seen that quite a bit, so really understanding what you can do with what you have is probably a smarter financial decision in the long run.”
Travers recommended advice businesses, prior to adding to their tech stacks, fix their data processes first then define what they want to achieve with technology.
“Then work out what the best solution is through a due diligence process,” Travers said.
He said he’s seen many people “just jump at the next shiny toy” which costs a lot of money to fix if it doesn’t work out.
Travers emphasised the importance of asking questions to gain an understanding of the day-to-day reality of the technology.
“Has it got some longevity? Are there some risks that you need to be aware of in terms of the way that data transfers?”
Carter and Travers agreed AI policy requires an approval process in place to accurately assess available tools as with all AI products, data security and privacy is a serious concern.
“I get really concerned about the financial advice industry just going out and buying tools and adding them, I think there’s risk to that,” Carter said.
“Making sure the right tools and the approval processes are in place, the data privacy [and] security rules and you’re meeting with the regulations.”
Travers said practices need to have a framework around AI products “rather than just bringing in bits and pieces and hoping for the best”.
A 10-page summary
The webinar also discussed the provision of a Statement of Advice and the benefits of a “summary document” for clients.
Alexis Compliance and Risk Solutions founding director Christina Kalantzis said a 10-page summary document of the SOA is “fantastic” because providing an SOA is a legal requirement, but the client will likely not read it all.
Kalantzis said creating a summary document is beneficial for both adviser and client as it saves the adviser time and explains the advice to the client in a way they can understand easily.
“We’re actually required to make sure that when we explain what the advice is, that it’s clear and concise and effective, and the way people do that is by doing a summary of the SOA,” Kalantzis said.
“It definitely evidences the fact that you’re explaining things to the client, and you’re doing it in a clear manner. When you go through that 10-page summary, to me, it’s like another education tool to the client to evidence the fact they understand what’s going on.”
Record-keeping
The discussion also mentioned keeping a record of all documents to confirm the client received the file.
“You can email the SOAs and all the hyperlinks to the clients. You need to have some record to make sure they actually received it,” Kalantzis said.
Kinetic Compliance director Nadia Docker also emphasised the importance of keeping a record of all the documents provided to a client.
“In itself, not providing a PDF isn’t going to be a breachable event, but certainly the record-keeping obligation overrides everything else,” Docker said.
Australian Financial Complaints Authority lead ombudsman Shail Singh agreed keeping a record of all client documents was imperative.
“When it comes to proof, you have to demonstrate that the client received the document, and that’s the bit that I think we need to be conscious of,” Singh said.
