Admin wasting adviser time

Taking time to help people make the most of their money is highly rewarding on many levels – yes financially, but also in terms of having skills that are generally hard-earned that you are using to make someone else’s life better, more secure, or more settled.

The thing is, this level of care and help takes time, whether that is face-to-face or not, and time is a finite commodity.

The trouble with the current regulatory environment is that time is being eroded by the administration required to ensure compliance with a wide number of regulatory burdens, not least Mifid II and the General Data Protection Regulation.

This level of care and help takes time, whether that is face-to-face or not

The Senior Managers and Certification Regime, which comes into effect in December, will merely add to this burden – but things are already stretched.

A close affinity to dealing with admin is not likely to have been the first reason most of you became advisers, but it is now the thing many of you are spending most time on.

Square Mile Investment Consulting and Research found that time in front of clients came third in the list of the greatest demands on time, with admin top and compliance second.

That cannot be right – not because I do not believe those are the biggest demands, I really do, but because when the best way to help clients is by sitting with them and going through their financial affairs, that should be the number one priority for advisers in terms of time spent.

But with Mifid II adding an extra 20 minutes of administrative time to every client meeting according to the Chartered Institute for Securities and Investment, things are getting worse not better.

Nucleus research found just one-in-seven advisers spend more than 40 per cent of their time with clients, down from one-in-five last year.

One-in-seven is a ridiculously small number of advisers spending a ridiculously small amount of time with clients.

Admin is a necessity in every business, and there are plenty of administration tasks any business owner outside our industry has to deal with as a matter of course. It is just how the world works.

But when you add the basic level of business administration into the overall admin and compliance burden suffered by advisers, it is getting to a critical level.

There is only so much time in the day and stretching that day to cover admin tasks while maintaining optimum client contact is not sustainable in the longer term.

Many advisers are choosing to outsource their regulatory compliance in a bid to free up more time, but that then comes at a cost.

Besides, the compliance outsourced will still need to be managed, and the company you outsource to will also have administrative requirements of you too.

So, what is the answer?

I agree that robust regulation is a vital part of our industry as it provides the best way to protect customers from rogue operators.

But there are times when it has to be considered whether the regulatory oversight has become so heavy it is starting to detract from the job that you each signed up to do: advising clients.

There must be some middle ground where the regulatory burden can be streamlined or reduced to allow financial advisers more time to help clients get the most from their money, and to give more time to get out into the community and meet more people face-to-face.

We have enough difficulty at present with people getting the advice they need, and the burden of administrative tasks is merely adding to this. 

The Financial Conduct Authority would do well to look at where areas of overburdensome administration to comply with its rules could be removed.

After all, the fundamental reason for regulation at all is to help clients get the best possible service from their advisers. But when they are drowning in a sea of admin, this is never going to be possible.

I genuinely would be interested to hear about the administrative tasks you have to fulfil on a daily, weekly or monthly basis that you feel are erroneous and do very little to help your clients get a better level of service from you.

Those things that you know are an exercise in futility even as you go through them, but that you have to do to get a big tick from your compliance officer – whether that is someone in-house or outsourced.

Let us gather together the worst wastes of adviser time that could otherwise be used to help clients, because that is the only way the regulators will be held to account for not doing their job effectively.

Alison Steed is a freelance journalist