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Bringing fact finds into the 21st century

  • Learn about how the fact find process is evolving
  • Grasp how fact finding systems can help with regulatory requirements
  • Learn about technological developments in obtaining and maintaining client data
CPD
Approx.30min
Bringing fact finds into the 21st century

A cornerstone of all financial advice, and a regulatory requirement for advisers as part of know your customer demands, a diligent fact-finding exercise lays the foundations for future financial planning. But familiarity, and improvements introduced by technological change, should not breed complacency.

A cornerstone of all financial advice, and a regulatory requirement for advisers as part of know your customer demands, a diligent fact-finding exercise lays the foundations for future financial planning. But familiarity, and improvements introduced by technological change, should not breed complacency.

Analysing clients’ income and expenditure, as well as obtaining information about their goals and aspirations, is far from the trickiest part of the advisory process, and the FCA’s recent decision to permit portable fact finds has simplified the process further.

Yet other challenges endure. Mark Loosmore, UK executive general wealth manager at Iress UK, says a battle between advisers and compliance departments remains an obstacle, with the former focusing on the process and the latter on regulatory security.

“Often we’re working with networks and national advisers that will have strong compliance departments at the centre, which will have a view, and then we’re working with the advisers as well and the difference is quite stark sometimes,” he says.

“I can think of examples where you’ve had fact finds going out of control – some with 150 pages. The reality is no adviser is ever going to want to engage with that and you can never put that online for a consumer. It’s not unusual to see a fact find that is too big, with the compliance department insisting it has to be that big. Six months later a slightly more streamlined fact find will be ready.”

Technology can help avoid this kind of scenario: in keeping with Mr Loosmore’s comment, it is often the smallest firms that are best able to take advantage of these improvements. 

A survey conducted by the FCA as part of its Financial Advice Market Review (FAMR) in 2016 found that 44 per cent of advice firms use a “significant” amount of technology as part of the fact-finding process. As Chart 1 shows, the figure stood at 47 per cent for very small businesses, compared with 41 per cent for advisers of other sizes.

Nick Eatock, executive chairman at Intelliflo, says those using more sophisticated technology to help gather information about their clients will be well-equipped to deal with the requirements of the General Data Protection Regulation (GDPR), due to be implemented on 25 May 2018.

GDPR’s aim is to protect all EU citizens from privacy and data breaches – and while this has consequences for a number of adviser practices, Mr Eatock says most modern fact-find processes should be equipped to deal with the regulation’s greater demands on data privacy. 

Advisers and clients are now able to interact through secure portals, with each having their own personalised view of the relevant information. Mr Eatock says this “gives that client a holistic view of their portfolio in one place. It allows the client and the adviser to communicate securely through secure messaging and document share, which is all in line with GDPR. It also gives them access to elements of the fact-finding process.”

CPD
Approx.30min
  1. What type of approach does Mr Loosmore suggest could be used to obtain 'soft' facts from consumers?

  2. According to Mr Eatock, how many days does it take a typical client to complete a pre-populated fact find?

  3. What does Mr Loosmore says was really driven by the UK government saying ‘We want to be the fintech hub of the world,’

  4. What does Mr Gallacher describe as being essential for advisers to have access to?

  5. Whats is described as a key risk for ported fact finds?

  6. When building new fact find technology, Mr Loosmore describes an ongoing battle between which parties?

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  • Learn about how the fact find process is evolving
  • Grasp how fact finding systems can help with regulatory requirements
  • Learn about technological developments in obtaining and maintaining client data

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