I’d like to give you some insight into how Infocus has managed to strike a successful balance in using technology to deliver compliant advice in an efficient manner post-FoFA.
What was the core challenge?
Many of the challenges associated with FoFA are well documented. The challenge Infocus saw, to state the obvious, is that compliance is a given. At the same time, however, advice businesses needed to manage costs to remain profitable, in particular, the rising cost of generating advice post-FoFA.
To get this balance right, we considered how:
- Services offered to clients would have certainty of delivery
- FoFA requirements around best interest, safe harbour and conflicted remuneration could be delivered
- The back office of an adviser’s practice could remain efficient so as to be able to generate advice at a low cost in this new regulatory environment.
What was Infocus’ response?
Infocus’ response was to integrate previously divergent technologies to create a single ‘practice management’ approach for advisers. We undertook extensive modifications to our proprietary CRM and advice generation software, Platformplus, to ensure the advice process was not only compliant but delivered efficiencies for advisers.
Commencing in October 2012, the program of work included:
- Integrating Infocus’ brokerage software (EasyDealer) into the Platformplus CRM. This was completed in December 2012. Infocus can now also integrate with a number of other brokerage systems including CommPay;
- Working with advisers to match client records in the CRM to fees by product and service from the brokerage system. Once fees are matched once, they are matched permanently;
- Modifying the CRM to ensure key ‘checks and balances’ are in place to check compliance for best interest, safe harbour and conflicted remuneration during the advice generation process;
- In the advice process itself, linking the Client Service Agreement (services to be offered) to workflows in Platformplus that prompt service delivery by the adviser;
- Adviser delivery of services via these workflows during the year; and
- Issuing Fee Disclosure Notices from the CRM.
How does it work in practice?
- Client Service Agreements: services agreed to be provided
When an adviser engages with a client, initially or at review, the CSA can be generated on the spot. To do this, the adviser selects relevant service from an extensive service list within the CRM.
- Workflows in the Platformplus CRM: ensuring serviced agreed are actually provided
Once selected, the services launch workflows inside the CRM that prompt advisers to deliver the agreed services client-by-client during the course of the year. The Platformplus CRM’s workflows and client segments are highly customisable and therefore match each individual adviser’s advice process.
Not only does this provide certainty that the services offered will actually be delivered, but it also offers the adviser the flexibility to deliver all types of advice, from scaled to full comprehensive.
- Issuing a Fee Disclosure Notice
The Platformplus CRM has ‘traffic lights’ in the system that change colour 90, 60 and 30 days from the issue anniversary date of the FDS. When an FDS is due, at a client-by-client level, the adviser will check inside the CRM to ensure that all services have been provided.
The FDS can then be auto-generated from the Platformplus CRM by:
- Taking the data from the CSA for services agreed to be delivered;
- Taking the data from the completed workflows for services actually delivered; and
- Taking brokerage data from the brokerage system for the fees charged.
The FDS are automatically produced in the CRM using either Infocus templates, or customised templates for individual offices. These can be distributed to clients via a number of means, including email, SMS, or via a link for clients to log in to the Client Portal section of the Infocus website.
Note this functionality is also applicable to opt-in notices.
The thinking about what’s required to be FoFA compliant is not especially new or innovative, but our solution is. We have ensured the advice process encapsulates FoFA compliance requirements via Infocus’ CRM and advice generation software.
In plain English, we built FoFA compliance into the CRM while still delivering efficient advice generation.
