The tips are split into five categories so you can see where they fit in the overall compliance picture. Some are easy to implement and some might require extra help but either way we highly recommend you take the time to read through them and see what adjustments you might need to make.

1.Disclosure:

Most FAPs are doing a good job on disclosure but could improve by:

• Having a better process for identifying if a complaint has not been resolved within two working days. This is important as the Complaints Disclosure Statement must be sent to the complainant if the complaint has not been resolved within that time frame.
• Remember there is no legal requirement to duplicate the same disclosure information multiple times. Have a good look at your advice process to identify whether you can combine stages two and three or shorten those disclosures with more information being included in the publicly available disclosure. This will present a concise and professional approach to clients. Strategi can assist with a redesign if you need help to do this. 

2. Complaints:

Most FAPs have done a good job developing and documenting their complaints policy but could improve by:

• Undertaking staff training relating to identifying and recording complaints. We have noticed that staff training relating to what is defined as a complaint and how to record it is often lacking. This has resulted in many FAPs having recorded zero complaints over the past 12 months. Both the transitional and full FAP licenses have a standard condition relating to the internal complaints process and recording of all complaints. Our online education platform – Radar - has some helpful CPD modules on complaints.

3. Governance:

Governance is a key focus for the FMA particularly when it comes to FAPs being able to demonstrate oversight by the board/director(s). Governance could be improved by:

• Having a board / directors competency matrix to identify and manage training gaps as well as having directors attend the Strategi Institute Governance Course where they will obtain a governance qualification specifically aligned to FAPs. This is important because all board members and directors need to have the competence knowledge and skill to govern a licensed entity. They need to know the regulatory obligations and good conduct expectations and be able to demonstrate they know the current status of their business and how they are driving improvements.
• Keep records of all board meetings. If the FAP has a sole director, then having a meeting agenda and keeping board minutes is still important. These do not need to be elaborate or lengthy but they are a good way to demonstrate you are meeting your governance obligations. 

4. Record keeping:

The FMA considers record keeping to be critical as it helps FAPs demonstrate compliance. Record keeping could be improved by:

• Ensuring all staff/advisers save information into the company directory rather than onto individual laptops. The FAP is responsible for the financial advice provided and it must be able to see client files.

• If communicating via WeChat, then ensure screenshots are taken and saved into the client file.
• If you have moved from one software system to another, then ensure all the data has been correctly transferred across. We are seeing instances where there is no client data or missing client data as the system migration was not properly checked before cancelling the licence of the old software system.
• Keeping records of the current commission rates being paid and correctly including these in the disclosure information provided to clients.

5. Overall compliance:

We are seeing a huge variance in the compliance status from one business to another. About 25% of those we have reviewed would be regarded as being fully compliant but still with some areas for improvement. The remainder still have some way to go. However, we appreciate this is a journey and the good news is many FAPs are proactively reaching out to us to do a compliance assurance review so they can identify their current compliance status and take steps to improve. Areas for improvement include:

• Ensuring the compliance officer in the business has the necessary training in place to perform the role. The Strategi Compliance Officer Course and qualification is the ideal place to start. This provides the knowledge plus ongoing support necessary for the compliance officer to do their job.
• Include an obligations register in your overall compliance assurance plan. This will list all your obligations relating to legislation, regulation, code, standard conditions, contracts and what actions are taken each month to check the business and advisers are meeting those obligations. Strategi can provide templates and training on this. Please contact us for more information

If you need help with any of the points raised in this article or have any questions related to compliance our team would be delighted to help. Contact us for a no-obligation chat today.