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How automated is your business?

With the onset of regulation and the discussion around disclosure, where MBIE is looking to not have a full disclosure document.

Monday, July 16th 2018, 8:30AM

This is likely to be more a requirement to have certain disclosures happen throughout the process, and this could get harder to manage quite quickly.

I’m seeing an increased need for the advice process to be more fluid than many advisers presently have.

Moreover, what I mean about being more fluid, is more opportunity to miss things out and find yourself in a position of not being compliant with the requirements.

The second part of this is the burden of getting this right, both for the client and the regulator, it is becoming more onerous, especially for the sole charge operator.

The only effective way of ensuring your consistency with your advice process, and the other processes in your business, is to look at automation.

However, for many advisers out there, technology is not a great friend. Advisers are people people, that is what we do well.

If we're to embark on a new world of regulation as it looks presently, the advice is going to have things that are very rigid and others that are going to be very fluid.

We need to be looking to put our businesses together in such a way that the cognitive load of remaining compliant, is somewhat external to our brains.

Yes, some advisers have this sorted very well presently with long tenure and experience. That isn't always the case for the smaller sole operator, more so if it's to change dramatically.

With the onset of compliance and licensing, I am expecting to see a number pull in the shingle and throw their lot in with larger groups.

I’m already seeing the dealer groups start to move towards how they might support and retain advisers, either as financial advisers or as nominated representatives.

However, for some they won’t like that, they won’t like being in a position where they are going to have to do this someone else's way.

However, whichever way you're going to go, the only real way to manage, and also demonstrate to the regulator you’ve got this, is through the implementation of technology.

Anybody that knows me well knows that my business is up the wazoo with technology, and frankly when the power goes off, or a data connection drops out, doing business is somewhat of a challenge.

However, for the most part, we don’t face those problems regularly, so the reality is a high level of automation in your business is possible, but you need to be prepared for it.

My top tip for building automation in your business; know your business.

What I mean by that is have clarity of every process that happens in it.

Right down to; who picks up the mail, when is it received, whom you expect to receive it, and how does it get handled.

SO to get started:

  • What’s your service?
  • What’s your advice?
  • How do you prep?
  • How do you put your advice together?
  • What do you do when you get a prop?
  • What’s the standard you work to?

And then make sure you do that?

Automating your business is far easier if you are really clear on what you do and how you do it. If you are inconsistent, changing directions regularly, patchy on approach, you are making life hard on yourself, and you are going to find the regulator harder to deal with.

There’s a lot of fear uncertainty and doubt floating round in the street, and ironically it is the pedlars of fear uncertainty and doubt that we’re buying into.

The reality is for good professional insurance businesses, whatever comes out of the regulation and the code working group, it should be relatively straightforward to meet the requirements.

Yes, we may see education move, with the bar and baseline for investment advisers being level six. However, this is going to be a hard pill to swallow to have advisers doing insurance go straight to level six.

Given level five was sufficient for investments last time round on category 1 products and nothing for category 2 products. The reasonable approach would be to move the bar for non-investment advisers to level 5 and then continue to review from there.

So to prepare for the oncoming challenges of compliance; my suggestion is to take a good hard look at your business.

-What is it that you can do to document your business
-What can you do to increase your automation
-Also, finally, sort your education out, get level 5 tidied up and be prepared for anything else.

Because fundamentally, these are going to be the building blocks of any regulated response.

Tags: Disclosure Insurance Advisers regulation

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