Consistent Inconsistencies

by Ben Street, Quality Monitoring Supervisor

Do We Deal With Consistent Clients?

One comment we regularly get as feedback (either direct to the department or via seminars) is that some IFAs feel that there can be inconsistency between file checks and associated work (and/or file checkers).

I do not for one minute claim that there could be no issues here. There are at least 14 individuals involved in our team, which can cover 600 pieces of advice a month (and that’s just cases looked at, never mind telephone calls, e-mail queries and the like). It’s likely, if not highly probable, that there will be elements of disagreement on the more subjective elements.

We constantly work on this, and the team is subject to ongoing monitoring and training to ensure a minimal amount of inconsistency in approach and process – but this is not something that can ever be entirely eliminated.

We are regularly questioned along the lines of “My last USP case got an 8, how can this one get a 3? This isn’t consistent as I used the same report template”.

On closer inspection though, the cases, while in the same product area, are often different in detail.

For example (and this is only a slightly exaggerated example of a real ‘identical’ pair we saw recently):

• Client A is a cautious client, single, aged 55, continuing to work with no need for income, with significant savings who want to take out their Tax Free Cash in order to purchase their lifelong dream – a sports car.
• Client B is a moderate client, aged 65, retiring, using TFC in order to pay off mortgage and then looking to supplement their final salary pension scheme.

Now, while not saying that in one of these cases the advice for USP is wrong and in one it’s right, the advice process and documentation to support the advice is clearly going to be different.

While they are both described as USP and will have identical technical content, the ‘personal’ elements of each file are going to be significantly different, and it is this type of variation that will generally lead to ‘identical’ business types being viewed and scored differently.

Recommendations are always going to be client specific. There are very few ‘identical’ clients out there – and as such there are going to be very few identical cases. (If there are, it raises the spectre of potentially formulaic selling!).

Another pertinent question we’re often is asked is why we can’t give out Suitability Reports (SRs) from files that have scored a 10. (Assuming we could get the IFA involved with permission (after all it’s their work) and redact all personal client information)

The significant point here is ‘redact all personal client information’. There’s little point giving you an SR from the file that scored 10, if the key factors that contributed to that score have been removed!

However, if you would like guidance on the standard content or sections that a file should cover, then there are of course templates and guides in the Document Library in Phossil to give you direction.

If you think about it, these are, in effect, what a redacted 10 SR would become anyway!

The key thing that we consistently try to communicate is that the FSA have repeatedly stressed that they expect to see client specific personal advice in each case, along with ‘SOFT FACTS’ (perhaps better described as peripheral notes), to give a file a individual texture and background.

They have repeatedly stated that this needs to be worked on by all IFAs, and they said it again in a conference on 27th January 2012 – “we see lack of colour in suitability reports and files”.
ben.street@financial.ltd.uk