Advisers overdoing the paperwork

The fear of not complying with regulations is prompting some advisers to churn out much more paperwork than what is necessary, an expert says

Friday, September 7th 2012, 6:38AM 4 Comments

Ange Lambert, a certified assessor who has marked over 250 Standard Set C assessments, spoke at the recent PAA roadshow about what and how much advisers need to do to satisfy the requirements of legislation.

And her message was that more is not always better when it comes to disclosure and other requirements around written documentation.

“The whole point of the regulations is to make advice more transparent and accessible to them [consumers]; keep it simple and relevant.”

Lambert said she had seen some “amazing fact-finders that are 10 to 15 pages long”; likely too long, she said, for clients to easily understand.

“You have to look at documents from a customer’s point of view; are you going overboard with the legislation?

“It can be very easy to go ‘I’ve got to put this and that in there’ and all of a sudden you’ve got two or three pages of disclaimers in the statements.”

She also told advisers: “Don’t be scared to tailor the documents to your business; the types of advice you’re giving and the types of clients you have.

The important thing is having a consistent process and sticking to it even though the documents may change.” Advisers should look for ways to reduce as opposed to increase their paperwork, such as by eliminating unnecessary duplication of documents, Lambert said.

For instance, she said some advisers were getting clients to sign essentially the same disclosure statement twice when they only needed evidence of it once.

She also warned insurance advisers to make sure they separately saved each version of policy documents, in case clients tried to make a complaint based on the current wording which had been changed.

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Comments from our readers

On 7 September 2012 at 9:45 am Andy said:

At last someone has seen the light and had the courage to speak up. Well said. Simplicity HAS been taken away and clients have been bombarded with more paperwork than they can handle. Is it ethical to give a client reams of documents that you KNOW they will never read, let alone comprehend?

On 7 September 2012 at 9:59 am Buill said:

Goodness I sometimes wonder if our whole industry is insane.

Driven by egos of those who think they can pick markets and forecast accurately.

Or training organisations using fear to get us to over function (thankfully not Ange Lambert)

Or just fear of the FMA - why ? do the job right, have no fear.

I am sticking to common sense plain English advice, and not too long winded either.

On 7 September 2012 at 12:28 pm Seve Ballesteros Ghost said:

Code set six boys and girls, clear, concise and understandable.

On 7 September 2012 at 3:11 pm Not so sure said:

Seems to me that its very easy to say "less is more" when you're not the one who will lose your career if, by some chance, it actually turns out that "less is less" and you've missed something because you've tried to "put yourself in the customers shoes" and stick to "plain english". The reality of the situation as it currently stands is there is the ability for upset clients to have a crack at the advice that they've been given and if successful the adviser loses their career. Until such time as a number of cases have been tested then its really a best guess situation that we're in. In which case it makes sense to have a super robust process that you can be confident will withstand challenge rather than a slimmed down process which may or may not stand up to the test.

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