Major Practice Gaps&

Lessons from the CBFP Scandal

17 July 2014

Major Practice Gaps – a Practical Guide

- File Keeping- Segmented, - complete record of what has occurred- No loose paperwork- For software systems follow a protocol- Try to ensure documents are in one place

Practice Gaps

- Documenting your thought process- Means file notes- Record comments during fact find process- Listen to what clients are saying about their needs and

objectives- Record your analysis following the client meeting- Document your research process- Document consideration of alternative products and

strategies- File note phone calls

Practice Gaps

- The Advice Process- Evidence of care and consideration- Follow a process- SOA should build on what has gone before- Understand the client’s needs and objectives and level of

sophistication- Be honest with clients- Keep it simple- Watch asset allocation and account for variations

Practice Gaps

Review Process- Do you understand your service proposition and does your

client?- Portfolio update v review of advice- Do you deliver what you promised- Match needs to expectations

Commonwealth FP

What is it really about- Remuneration targets- Inappropriate advice- Inappropriate products- Mismatch between risk profile and recommended asset

allocation- Lack of review- Defective soas- Allegations of forgery- Dispute resolution process lacking

Commonwealth FP

Ethical failings underpin much of theCBAFP issue.

FPA Code of Ethics & Professional Responsibility provides:

- Client first- Integrity- Objectivity- Competence- Fairness- Confidentiality- Professionalism- Diligence

What does it mean in practice and how does the best interests duty fit in ?