Originally published | 13/03/2019
One of the things that I am constantly discussing with advisers is how to formulate an advice document that meets the obligations of evidencing your recommendations are in the best interest of the client.
For some reason, as an industry, we seem to have a knack for wanting to over complicate things. Whether it is to make ourselves seem more intelligent or knowledgeable I’m not sure but the secret in documenting advice that meets the obligations of best interest rest in two main points.
The first has recently been highlighted by Keith Abraham in one of his motivational LinkedIn posts. “When the why becomes clear, the how becomes easy”.
The second is based on a quote from Einstein. “If you can’t explain it simply, you don’t understand it well enough”
The foundation of all advice is understanding the client’s why?
Why do they want to achieve a specific goal? Why is something important to them? Without understanding the Why, you can’t build up to the how.
Most advisers seem to forget to document the why though. They know it, because the moment the question is asked, they can replay the scenario but it’s documenting it that seems to be difficult.
The other side of this is then that advisers seem to be determined to utilise templates text in advice documents to avoid the personal side of advice. This personal side is the “why”.
Here is a case for you. A client tells you during their initial appointment, when asked about concerns, that they are unhappy with their existing super fund because it was set up by their employer and they left that employer due to workplace harassment. The client tells you that by holding that super it reminds them of that time. When you are documenting the reasons for replacement, wouldn’t the key one be that they are unhappy with the current provider because of poor experiences?
Advisers know the personal stories of their clients but seem reluctant to use these stories to justify their recommendations. It is these stories however that formulate the basis for their recommendations.
If you understand and document the client’s why, it is easier to evidence that you have acted in their best interests.
