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.”
Portability
In all cases, the need to capture a large amount of client information should be balanced with a process that keeps the consumer engaged – in other words, one that isn’t too time-consuming. This is particularly important given many advisers now charge by the hour.
It is something the FCA has also been keeping a keen eye on; reducing the cost of advice is clearly an obstacle to be cleared if the advice gap is to narrow. And initiatives arising from FAMR may prompt the most obvious change to fact-finding practices.
One of FAMR’s initial recommendations was for the FCA to “consult on guidance to provide clarity on the standard types of information required as part of the fact-find process. In addition, the guidance should also set out key considerations for verifying a fact find that has been performed by third parties”.
As a result, the paper ‘FG17/8: Streamlined advice and related consolidated guidance’ was published in September 2017. Within the 56-page report, the regulator highlighted the potential of “porting” fact finds between advisers. It suggested that removing the need for duplication when seeing a new adviser would offer greater convenience and reduce costs for the consumer.
“Portability of the fact find just means getting access to the data effectively, so if your data is available through an application programming interface and the customer can see it, you’re providing that portability,” says Mr Eatock.
The risk of complacency may be particularly acute here, however. Moving across an existing fact find from another firm runs the risk of an adviser assuming their work has already been done. In reality, circumstances may often have changed. Mifid II rules requiring advisers to ensure the information they receive is reliable are particularly relevant in this context.
In light of this, the FCA paper’s additional information regarding do-it-yourself fact finds is also of interest to advisers.
