The new regulations have brought about some changes to how advisers need to handle disclosure. Once seen as a two-step process of primary and secondary, disclosure now relates to many different stages throughout the process.
At OMNIMax we have built compliance into the DNA of our solutions and so when the regulations changed, so did we. This progressive disclosure mandates that you disclose why you are doing something at the time you are doing it. We’ve defined this in four stages, at each stage the disclosure gets deeper, and we’ve integrated this into our Advice Platform.
Stage 1
Public Disclosure – Before you engage with a potential client.
In our Advice Platform, the first step in the advice process is a fact-finding mission. At the beginning of this process, when your client embarks on their fact find, the first screen that they see handles this stage one of disclosure. Here you can detail the information that is being gathered and why and the providers you might use. You can also include a link to your public disclosure that covers your qualifications and experience, the services that you provide, the companies and products you might use and your remuneration.
Before your client proceeds, they will acknowledge this information and that they have read the disclosure statement. This is recorded in the system with date, time, and their IP address.
Stage 2
Scope of Service – Your client has filled in their details and is at the end of the fact find discovery.
Before they submit their information to you, and you start the advice process, you define the scope of service. Whether it be KiwiSaver, Investment, or a more comprehensive financial plan, this is detailed to the client. Any fees that may be applicable can also be detailed.
Along with reading your privacy policy, the client acknowledges their understanding of your scope of service and confirms their information is correct. Again as they confirm this the date, time and their IP address are recorded in the system.
Stage 3
Your Recommendation – After you have assessed a client’s needs and are making your recommendation.
At stage three, you need to disclose such things as any commissions and other incentives, your fees, as well as detailing your duties as a financial advice provider. In our Advice Platform, this is added to the appendix of the statement of advice by either typing directly into the template or uploading a PDF to display in this section.
If there are different fees for different providers, load these against the provider. The Advice Platform will dynamically add these into the document depending on your recommendation. Disclosures for recommended products will also be included in the appendices of the document.
Stage 4
Complaints Procedure
At this point it is also possible to add your complaints procedure into the statement of advice. We like this option as it keeps all of your disclosure within the system.
For your client to acknowledge stages three and four, continue through the advice process by authorising the advice and creating an authority to proceed within the system.
Your client will then log in and authorise you to proceed with the advice (or not proceed). They will acknowledge that they have read and understood the SOA and that they have read your disclosure. You client will also acknowledge that they have read and understood the product disclosure and that they have disclosed their correct information.
Clients can also make any additional comments here. As with all stages, the date, time and clients IP address are recorded for your records and compliance.
There’s a lot to consider with the new disclosure and we hope this gives you some idea how yours could be setup. If your disclosure does need some work to meet the new regime, get in touch for some instruction.
Updated in August 2023 with new product name.
