FASEA Standard 8 record keeping obligations: how to comply

As a result of the Royal Commission report, FASEA introduced a Code of Ethics for financial planners that includes extra record-keeping obligations.

The chances are you're already struggling to deal with day-to-day administration, consultations and reporting. Adding the burden of yet more documentation to meet compliance can seem like just too much.

How can you comply with the new record-keeping obligations without drowning your business under the increased workload? In this article, we'll help you understand the new requirements and show how the right technology makes them manageable.

New Code of Ethics for financial advisors

The Royal Commission report saw a shake-up of the entire financial planning industry. One of the key outcomes was to "raise the education, training and ethical standards of licensed financial advisers in Australia".

The Financial Adviser Standards and Ethics Authority (FASEA) was responsible for making those outcomes happen. As part of this mandate, it created a compulsory Code of Ethics that all financial advisers need to adhere to. The Code is made up of five values and twelve standards.

The eighth standard refers to your record-keeping obligations as a financial planner.

What is FASEA Standard 8?

FASEA Standard 8 aims to improve financial planners' record-keeping. It requires you to "ensure that your records of clients, including former clients, are kept in a form that is complete and accurate." The FASEA explanatory statement further clarifies that you need to keep records of all the advice and services you provide.

That means more than recording a bare minimum of personal information for each client. It means keeping and filing every piece of correspondence between you and your client — not just physical documents, but also emails, voice recordings and notes from meetings.

Keeping clear, accurate and complete records is also key to proving you've met other standards in the Code. For example, it provides evidence that:

• You've acted with integrity and in the best interest of your client (Standard 2)
• Your client has understood the advice and recommendations you've given them (Standard 5)
• You've taken all reasonable steps to give advice that's accurate and in your client's best interest (Standard 9)

Your record-keeping obligations as a financial adviser

You're now required to keep a lot of documentation. If you're like many financial advisers, you'll need to completely overhaul your record-keeping systems.

Some of the information you now need to document includes details of each client's:

• Current circumstances
• Broader, long-term needs and likely circumstances
• Family members' broader, long-term needs and likely circumstances

Plus other information that may come from meetings with your client — for example, their ability to tolerate risk, their attitude to money, and your analysis of their needs and goals.

You'll need to store a large quantity of information for each client. The standard also requires you to keep all records securely in a way that meets the Australian Privacy Principles.

Most of the industry is currently focused on ensuring historical records meet the new standards — but that's only half the picture. Fixing historical records is a time-consuming, one-time job. You should use this change in requirements to also find a cost-effective process to manage record-keeping going forward. Manually keying in data after each client interaction is inefficient and costly. Automating the collection and recording of all that data will save you time, effort and money.

How Umlaut can help you comply with FASEA Standard 8

Umlaut has extensive experience helping financial advisors and planners improve their data management. We have a range of services specifically designed to help.

Digitising historical records

Our Phoenix service is designed to get your historical records in order, no matter what state they're currently in. Whether they're paper records stored in the spare room or digital records scattered across multiple hard drives, we can create order from your chaos.

We take all your data, scan in the paperwork with our high-speed scanners, then sort and file everything into your Xplan account or System of Record. We also identify any anomalies or gaps in your information so you can take action to address them.

Automation going forward

Once your data is digitised and centralised, our other services can also help you meet your FASEA record-keeping obligations going forward.

AdvisorForms takes the hassle out of dealing with manual forms. Customisable online forms let your client enter their information directly, then automatically sync the data with your System of Record. No more time-consuming, error-prone manual data entry, and no scanning, printing, posting and chasing forms. AdvisorForms keeps your data accurate and saves your firm hours and dollars.

Our BI & Reporting service then layers visibility on top — giving you a consolidated view of all your client data, the ability to spot gaps quickly, and the kind of evidence-ready reporting that makes compliance reviews far less stressful.

Make your FASEA compliance simple with technology

Your obligation to keep complete, accurate records for each client and every interaction can feel like a millstone around your business's neck. However, the right technology can easily digitise and centralise your old records, and then make ongoing data entry and retrieval quick and simple — saving time, effort and money, and making your business far more efficient and competitive.

Get in touch with Umlaut to map out the right approach for your practice.