In February 2013 I wrote a blog on an interesting new web site called Adviser Lounge entitled ‘Death To The Fact Find’. A recent experience prompts me to update this piece.
I attended a compliance course last week on the subject of risk. One way to reduce the risk in a business (we were told) is to have excellent information of your client. Write everything down. Probe the client. Fill in every box of the fact find. Maybe even record the meeting. Just get that darned information on your file!
After the first session I approached the speaker, an intelligent and worldy wise chap. I offered my thoughts on his talk, expressing my concern that an adviser of limited experience could have construed his advice to mean that the fact find is the most important aspect of their job. That if we followed compliance advice to the letter the client experience would be considerably worsened. That compliance was actually stopping advisers from doing their job properly because all this gathering of facts to appease the regulator was getting in the way of really getting to know your client properly.
To his credit, the speaker entirely accepted the point. He even mentioned it later in the day. And he was, after, all only doing his job, part of which is helping firms not get sued. Or if they do, making sure they have a robust defence by proving they had received all the information and have it on file.
What did concern me was that I seemed to be the only person who was concerned about this issue. Maybe others thought the same but didn’t feel like making a fuss.
Towards the end of the session the speaker asked if anyone thought something was missing from the fact find he had been through. The speaker suggested there might be one extra area – objectives. He asked how many advisers in the room include objectives in their fact finding. Only a few arms went up.
If the first meeting is all about facts this sets the tone for the future relationship. If a first meeting focuses on investments then investments are likely to be the focus of future review meetings.
I would suggest that the first meeting or two should be used to help clients better understand their objectives, followed up by a plan to help get there. Each review then concentrates on tracking progress to those objectives. I’ve written blogs on the subject of how advisers can help clients understand themselves better (by using coaching techniques).
When fact finds were first introduced they were a list of product areas and the adviser’s job was to find the boxes which were blank and sell the client the required product. Now fact finds seem to be the compliance officer’s domain, completed by the adviser and used to protect a firm against future litigation.
Death to the fact find, I say. Let’s take it away from the adviser completely and find other ways to gather the hard details. In that way the client facing time can be focussed on the client, their hopes and dreams, and not the gathering of facts.
As it’s Christmas I hope you will forgive me a posting of a link to my novel