October 13, 2021

Efficiency Series #4 – Transcript

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Efficiency Series

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SUMMARY KEYWORDS

compliance, client, advisor, data, software, business, technology, people, licensee, risk, fraser, flags, point, important, signing, meeting, process, efficiency, system, security

SPEAKERS

Fraser Jack, Ivon Gower, Mitchell Ramsbotham, Jodie Douglas, Vicky Andrews, Phil Thompson

 

Fraser Jack 

Welcome back to this episode on innovation brought to you by Morningstar. And we are covering off on the compliance side of things, all things compliance when it comes to technology and efficiencies. Welcome back, Phil Thompson.

 

Phil Thompson 

Thanks, jack. Oh, sorry, Fraser. Thanks, Fraser.

 

Fraser Jack 

Thank you for hanging out and talking to us about all things efficiencies, when it comes to technology. Today, we’re talking about a compliance one of our favorite topics, of course, we you sort of left off in the last episode talking about the idea of, you know, the software being beneficial for making less mistakes, and certainly doing things that that you know, need to be done, or the timeframe that needs to be done and having that automation in place so that we’re not relying on human beings. Tell us how you, you were how you see software in this process.

 

Phil Thompson 

And for me, software, I think I said in one of the other episodes, it really needs to do one or three things, you know, needs to help improve the client experience helped make me and my teams more efficient, or help us be more compliant. And so in the compliance area, like it’s, I mean, it’s a huge, huge thing for what we do. So you know, having easy access to data, you’ve asked to give a knock on our door, as per, you know, one of the fancier standards, whichever now, I’m sure you know, the number that I’m referring to, but the ability to get easy access to data, well, if it’s if paper documents are in my filing cabinet, and then I need to scan at the end, and that’s, that may not meet the fanciest standards. So that’s one area of compliance where if we’ve got the data, and it’s all easily accessible to our systems, then if asked to give a knock on my door, which you know, they did for the lF review, I had to have my essays review took me half an hour to get it already and send it to the licensee. The second area of compliance is just accuracy data. So that’s an area of growth for me and my business is how do we make sure we’re not making mistakes with any any of our Essos or, you know, just simple things like income being associated with the wrong person, we’ve had, you know, Essos go out where we’ve actually done the wrong income. because someone’s just input some data or date of birth, you know, with an insurance date of birth, you know, if you’re five years younger or older, that has a massive impact on premiums. So they’re the kind of areas where having really well integrated software will reduce that that human error.

 

Fraser Jack 

Yep. And has it been bringing data across so that the data entry, I guess, is that were you referring to the data? Correct? Yep. Yeah, exactly. Yep. And I think as you mentioned to that, that idea of proof that, you know, here is a file here is the proof of everything that happened when it happened. All those you know, timestamps along the way or the all those sort of things for email, whether it’s email or whether it’s in your system.

 

Phil Thompson 

Yeah, exactly. And I mean, just even because we are insurance only so from a compliance point of view, we need to make sure that the client understand that and their clients agree to that and the clients are happy with that. And the clients want insurance only advice and not full service advice. So from a compliance point of view, that’s really important to us to make sure we’ve got all those checks and balances, that we can prove ethic that we’re not just flogging insurance policies to anyone who wants you know, investment advice. We’re tailoring our client experience to the client and what their goals and objectives are. And so we use software where we’re very clear with our clients fire the first phone call that were insurance only, and just having a file note saying I told the clients that they weren’t there we only do insurance and they’re happy with that isn’t good enough. So we also get them to sign the terms of engagement. There. says, I understand that it’s insurance advice. So all of those things sign terms of engagement before we do any work is is really important.

 

Fraser Jack 

Yep. And when you say signing, what sort of, what sort of signing are you doing with your signature?

 

Phil Thompson 

Yeah, let’s like try Shani. Yeah. So yeah. Yeah, via one of our software providers signing off on on a chance to get engagement electronically?

 

Fraser Jack 

And and how do you see the the concept of you know, the the data and the security data being sort of different now in this new world?

 

Phil Thompson 

Yeah, I mean, I think it’s, it’s super important that we are cautious, the benefit of having all the data in my filing cabinet is no one’s come in and grabbing my filing cabinet. And so you know, that data is very secure. Having it all on the cloud, and all provided electronically, reduces the or each sorry, increases the likelihood that something’s gonna happen with that data. So it is super important. And again, it goes to that compliance, making sure that we are protecting our clients data, and it’s not going into getting into the wrong hands. So it is a big area of focus for us is to think about, how do we have that data?

 

Fraser Jack 

Yep. Are there any sort of other risks that you see in this process? When it comes to I guess, the compliance side? Or?

 

Phil Thompson 

I mean, we’re talking about financial planning, there’s risk in everything we do? It feels like there’s we were working on potholes every day. And so I mean, there’s there’s plenty of risks there like the the risks I see in my practice. And the way I think about it is, yes, we get clients to sign off on our terms of engagement, saying it’s risk only. But signing an electronic document, when paying a fee is very easy to sign off on that and turn around, you know, three years later saying, actually, I didn’t have signing there. So there is always that risk of, you know, the clients can sign something. But do they understand it, and having not being there, when they’re signing it and re communicating that when they’re signing the original kind of terms of engagement? increases that risk that they don’t know what they’re signing? They’re just quickly signing off on it?

 

Fraser Jack 

Now I see, I see, obviously, when it comes to efficiencies, compliance has been a over the over the last, you know, 1015 years, a big, big cost on the business when you’re doing it manually. And then when you think about some of the efficiencies that can take place with technology, in the space with regards to you know, maybe, you know, things automatically saying, Yes, all these people have been sent there, all these people have been sent there. How do you see the idea of, you know, compliance, or the cost of compliance, maybe coming down or being more efficient using technology?

 

Phil Thompson 

Yeah, I mean, the high end area of compliance, you know, that’s very relevant in my world right now is with the first of October income prediction changes. I’m sure this is coming out after that. But we are very cautious that we need to make sure our clients are fully aware, and that they’re making an informed decision, their income protection, and they’re not just rushing in just to get a policy in place. And we also need to make sure that if clients don’t go ahead, we’ve got the records that we followed them up multiple times with multiple ways of communicating email messages, whereby they were followed up with. So for me, I can sleep at night going, Well, a client’s not going to come back to me in a month’s time and say, Hi, I’ve got this worse income reduction policy. And if I claim in 10 years time, I’m going to come and sue you, because I can show that I’ve got the record. So now we gave them enough notice. And we follow them up enough times to then go well, you know, here’s a claim if you choose not to go ahead, and that’s okay. But it is not our fault.

 

Fraser Jack 

Now in a future world, you know, the the perfect scenario for technology and compliance. How do you see that panning out? What sort of things do you see in this space when the compliance space that would be just like incredible to put the most incredible outcome?

 

Phil Thompson 

I mean, there’s so many things that fight like financial planning, we are so backwards in our way of doing this, and we got so much to move and compliance. My view is compliance isn’t necessarily the one holding us back all the time, like, our fear of actually moving is can be the one holding us back and we just kind of call it compliance because that’s easy excuse. So yes, compliance has a bit to move. But the future advices I mean, super bright. Like, I think, if we building compliance into everything we do, and think about, you know, are we meeting the standards that we set ourselves and that the regulator set for us? We kind of baked that into every every step of the process. And that’s the way I think about it as well.

 

Fraser Jack 

I it’s an interesting thought. I think you’re I think you’re right, the I think a lot a lot of the time compliances is used as as the excuse.

 

Phil Thompson 

It’s a financial planning Boogeyman. It’s so easy to put in compliance for everything. not profitable and Africa is a compliance. Well, I okay.

 

Fraser Jack 

Fair enough. Thanks for coming on this episode. We won’t leave it there. And we’ll catch you in the next episode where we talk about change management. Thanks. Right. Welcome back, Jerry Douglas. Hi, Fraser, thank you for joining us today. Now we’re talking about compliance in technology and innovation and all the things that efficiencies that come into this new world of compliance obviously, from your point of view, you not only the business owner and advisor, that mad about life, but you’re also the responsible manager and licensee as a self licensed planner.

 

Jodie Douglas 

Yes, that’s correct. I now wear many hats. But really, they’re all hats that we wear anyway, as an advisor. It’s just a little bit more differentiated between the three.

 

Fraser Jack  

Yeah, yep. Fair enough. It’s a bit like I guess, you know, being the self I related back to the self managed Superfund trustee conversation, it’s still you, but you got away the trustee had today.

 

Jodie Douglas 

It’s just a different hat. Exactly. Yeah.

 

Fraser Jack 

Talk to us about, you know, your systems and processes and how that works when you’re overlaying compliance. Yes, certainly.

 

Jodie Douglas 

So when it comes to digital technology, it’s about making sure that not only does it meet in efficiency requirements in terms of the client, but also the compliance side of things. So I actually one of my points that I wrote down earlier, was putting technology in place to solve a client efficiency problem is one thing, but is it going to also make our compliance efficient as well? Or would it create more problems? So when we’re looking at our technology, we need to actually have those two checklists around the requirements of what we need to fulfill in terms of the efficiency tool, but also the compliance tool, security measures, all of those sorts of things as well.

 

Fraser Jack 

Yeah, it’s certainly a big part of it, isn’t it security, when it comes to data, talk to us about, you know, that, just that the data security and how much effort you’ve put into that,

 

Jodie Douglas 

yeah, certainly. So really important when as we have 10 different software’s we always need to consider, okay, having these separate means we need to make sure that they all separately meet those security measures. And that can be quite tricky sometimes, because each of the software’s have their own secure security requirements within them. One of the things that we utilize in our business is LastPass, for our password security, and that is updated regularly in terms of those those passwords, it’s one sign in, and it stores them securely. So that’s great, and ensuring that nobody has passwords saved locally on their computers, and so forth. It’s all within that LastPass secure mechanism. That’s what’s one of the key things. And then also, you know, updating passwords and things like that regularly as well. We also don’t have anything saved locally, everything is saved. That’s client orientated within our advisor, logic CRM. So we don’t have Dropbox or OneDrive with client information. It’s all held securely within the document vault of advisor logic, and we know that that secure, therefore reducing any risk of breaching those security requirements, which is really important.

 

Fraser Jack 

Yeah, absolutely. Now tell us about the, the idea of and I know that you’re across this because you catch up every month on it, but the idea around, sometimes compliance can be you know, not thought about or not, you know, you’ve put something in place and they just trust it, it’s gonna go on and go forth. And and you almost come to that point where you just rely on software always going to be there and do the thing you’re meant to without actually going back and checking on it regularly.

 

Jodie Douglas 

Yeah, you can’t do that, because everything changes all the time. And our requirements change. And so does the software requirements are so really important that we’re always reviewing that. I can’t think of anything offhand. That’s happened where we’ve needed to change in that simply because of, we have everything within that one CRM and we’ve made a really strong business decision to ensure that client information is not is not spread any further and then within that advisor logic CRM, and it’s only held within those different software’s for the purpose. So for example, Zoom Zoom meetings, we don’t use the recording function within zoom. I do voice file notes and save them within a vital logic. So we just try and reduce the spread of information by just utilizing that one CRM and deleting it off other areas as required once it’s in there. It’s an

 

Fraser Jack 

interesting point to making sure that you actually take the time to delete stuff for it’s not needed.

 

Jodie Douglas 

Yes, most definitely. Even our like our Downloads folder, we do a regular, like teams update to the whole team every Friday, whereby we say Don’t forget to delete your downloads file because otherwise it can end up missing cynefin slow everything down. But also, you know, it’s keeping things locally. So little things like that within your business to ensure that you’re meeting those security requirements. You know, not just forgetting that, you know, computers are wonderful, they’re actually saving things as well.

 

Fraser Jack 

Yeah, we’re just out of a job. Talk to me about future, the future of compliance, do you think obviously, as as data becomes more structured, and, and we can, you know, maybe look at key risk indicators and guardrails and things like that, talk to me how you see the maybe the future of compliance. You’re

 

Jodie Douglas 

definitely technology is evolving, and we are always moving forward. And I think the world of compliance is starting to look at, okay, we need to have efficiency, and we also need to have compliance. And how do we do this, I really feel that the software providers that are well placed in terms of evolving are going to manage that for us. I’m hoping that’s the case. I’m hoping advisor logic and Morningstar actually come out with some really great tools to be able to look at how our advisor practices like us currently doing things with all of these different apps and having it all within the one. And I think that that would tick off many of our compliance requirements, particularly security, and privacy, by having everything all within that one tool, which would be great for efficiency and compliance. Yep.

 

Fraser Jack 

Fantastic. Jodi, thank you so much for coming on this particular episode, we look forward to catching in the last episode, we were talking about change management. Thanks, Fraser.

 

Jodie Douglas 

Look forward to it.

 

Fraser Jack 

Welcome back, Mitch.

 

Mitchell Ramsbotham 

Thank you.

 

Fraser Jack 

Fantastic. Thank you. So now in this episode, we’re talking about all things around around compliance when it comes to technology. And, you know, obviously, there’s a lot of work that technology can do in this space. Tell us about your experience.

 

Mitchell Ramsbotham 

So compliance for me sort of has a bit of a double meaning compliance both with what we want to be a really slick and very trouble free client outcome compliant client outcome, as far as the delivery of that by technology, but also compliance as far as it pertains to the to the end to the to the end advisor that’s using it. So some of the key indicators for us that I’ve sort of alluded to quite heavily controlled by the licensee. So right now for us in the evolution of our business really isn’t an issue. At being guarded, guarded by a live since institution, we can be conscious that, from a compliance point of view, we can lean on them quite heavily, and utilize all of the hard work that they’ve done with an acute awareness as a large organization of what that needs to look like. So we really, we sort of really appreciate the the licensee oversight, but from a, from a compliance point of view, the use of technology for us, these probably more coming to bear in the change and evolution that we’re seeing in the industry around just the rigors that the advisor is having to go through in respect to maintaining their individual AR compliance in this current world, our business, just for color and context has moved to fixed term service agreements. So a year on year renewable client service agreement. And around those, there is some really significant metrics that need to be met throughout the year and we utilize the software our software to do that to drive that really, really finite Lee throughout the business. So the all of the tasks and threads and reminders that come out of the software are really quite significant. And it’s not just the you know, some of the larger proprietary ones that do that there’s actually a couple of gentlemen down in Melbourne that have developed a program that you know, in no way affiliated, but but just something that we’ve been looking at it’s called I comply and these guys have built a really sophisticated into win compliance program where it’s real paint by numbers the whole way through and, and really assists in you know, that other aspect of compliance that I’m talking about, to make sure in this current environment where we are just, I don’t know if it’s the right way to put it, but walking on eggshells, and just really tiptoeing around all of the compliance requirements that we have and and just how fraught with danger, you know, fraught with danger in a number of different ways be that financially and any other any other aspects that may that may bring to bear. We I see it and we see it right as really, really important to have a very effective tool to assist you to manage those really granular, required and very finite list of list of tasks that you have per client year in, year out. And there’s some really fantastic solutions out there around it,

 

Fraser Jack 

it’s an interesting one, isn’t it, because obviously, there’s two sides to this one is, you know, if you reliever to a human being to make these, you know, to remember to do anything, something gets missed, for sure. And then we and then so we implement a software or system or a process in place where, where we then now rely on it software and system. And, you know, if this, if for any reason the system doesn’t do what it’s meant to do, then, then, you know, often there’s nobody checking. Yeah,

 

Mitchell Ramsbotham 

and I suppose that comes back to that integration pace, right, and leaning on the developer, and having a really good understanding and relationship with whoever that provider is to make sure that there is some some parameters and guidelines and a really good understanding. And I know that this is probably getting off compliance, but it actually helped that you know, that it actually helps with compliance when, when implementing any of these in your business, we tend to have a subject matter expert with any of the particular programs or suites and programs that we’re employing. So that you do have that individual in the business that can provide the overlay or sense check at any stage to make sure that if you are wholly and solely reliant on the program to be giving the right outputs, you need to make sure that there’s somebody in the business that can that can verify and ratify that we’re giving the right inputs to get that out in the first place. So that’s a very important part from us, for us from a compliance point of view is making sure that there’s somebody really specialized in your business with that particular product suite to ensure that we’re using it to its fullest extent, and what we’re getting out is correct to a tee.

 

Fraser Jack 

Yeah, that’s a really good point. And if you need to make any minor changes, obviously, most software packages allow you to make you know, a lot of changes internally and develop a lot of stuff internally. And so to have somebody like you said, a subject matter expert inside your businesses is a great idea. Yeah. Talk to us about it, maybe they the idea around with with compliance or like or the cost of implementing software, and how you see, software’s maybe, you know, helping with reduce some of the cost of compliance.

 

Mitchell Ramsbotham 

So we’ve seen a significant reducing the cost of compliance recently, and this is out of the back of the implementation of a software suite coming out of our licensee, they’ve got a what is I suppose I suppose a goals based multi tool calculator type program that we use that, from a compliance point of view, is almost failsafe it’s manipulated by the client, it’s then provides an output to the advisor and the client to be used in a secondary meeting. And not only does it engage the client and engage the client to the extent that we have had significant direct client feedback just about the uplift and experience that they’ve had in the employment of this software. But then when you look up, look to the other side of it, both the client directly the advisor, then in the meeting, verifying the data and utilizing that data in their presentation. And then having automated outputs without having been transposed across has limited human capital time checking, and provided that because of the way that the synergies that it has with our advanced delivery of software, the fact find the modeling and all of the things that come out of that directly flowing into x plan has made that we have I suppose increased capacity of our team and shed some of those are onerous more granular in the weeds, tasks that would have involved handwriting and scanning and emailing and all those sorts of things, uploading to certain programs, they’re gone now. So we can then pivot those people into producing more revenue. So by virtue of being able to do that, the cost of compliance actually potentially reduces. So I actually see that there’s everything’s about perspective, Fraser. It’s if you look at the direct cost, you can get stuck in the weeds, if you look at the capacity, that it can rejected it that it can release to allow the specialists in your business to be out there generating revenue and doing what they what they need to be doing. I would argue that you probably end up in a net neutral position in a lot of circumstances.

 

Fraser Jack 

Yep. Fantastic. Thanks so much for coming on and chatting to us in this episode. We look forward to catching you in the next one. Awesome. Thanks, Matt. Welcome back, Vicki.

 

Vicky Andrews 

Welcome back, Fraser.

 

Fraser Jack 

Thank you. Now in this episode, we’re talking a lot about capital which you probably don’t know a lot about the financial services compliance in the regime, but I’m pretty sure you would have your own set of compliance rules.

 

Vicky Andrews 

We do we operate under a regulator, like most industries, and many of our agile projects have a large compliance piece to them.

 

Fraser Jack 

Yep. Fantastic. So obviously, compliance is a big part of the decision making process, when you’re looking at projects or sprint, tell us about how that comes in. When that comes into the process.

 

Vicky Andrews 

Yeah, we talk a lot about the risk of not doing versus the the risk of getting it right, and how much time that may take. So there’s a definite play in Agile around our risk tolerance, which comes into meeting compliance. But at to what level, we’re used to probably being quite risk adverse, and spending an awful lot of time ticking compliance boxes to the enth degree. So we have a quick chat about that. And then we really work on a system of making sure that that compliance approval is done early and during rather than a card getting to the point where it could have been released to our customers other than an approval tick. So we want that running alongside the work a compliance piece.

 

Fraser Jack 

If it doesn’t, so it’s about it’s about putting the compliance work in early when the call when it’s still a concept. Talk to us about talk to us about that. You mentioned that some of the risk is changed from the big long tick box compliance thing. Can you go into that a bit more deeper? Yeah. Like

 

Vicky Andrews 

obviously, in our even in our prioritization techniques, and must have, so there’s like legal and regulatory requirements that we put in our must have. But there comes a point, if we can’t get all of those done, what is the risk? If there’s 10, tick boxes? And number 10? It’s not, we haven’t managed to make it nine times out of 10. Suppose we need to get them all. But we have to actually try and use some of our agile systems and tools to give our product owner a version of what would happen if we went to release without what we didn’t manage to get to done. And that includes compliance.

 

Fraser Jack 

Yeah, fantastic. And how do you see, you know, data and technology improving the compliance process over time? Yeah, so

 

Vicky Andrews 

I think we get quite system and process we get our systems and processes really streamlined to put through small packages and easy pieces of work, that we used to probably start from scratch. So templating. So we have a lot of business partners in Telstra, and our legal department, in a lot of our regulatory in risk, who partner with the large functional heads to sort of say, these are the things I need to see, because you’ve made quite a few mistakes in the past in this area, or they’re just such a big risk for us that they’re the mandatories have to have those there must have streamy these ones down here, I’m gonna let you have a play, I’m gonna let you roll with those. And we’re going to evaluate how you went at the end of our sprint review.

 

Fraser Jack 

Fantastic. And sometimes, obviously, there’s, you know, a short history of compliance within financial advisors often rules, rules made to protect consumers, which is great. And then and then it’s an interpretation that comes in after that. And there’s often different in weird and varying interpretations. How do you guys get around that? I guess? Do you have to, you know, I guess it with it’s just one companies, it’s easier to just say, No, this is our interpretation, we’re just gonna have to build this.

 

Vicky Andrews 

I guess it’s a compliance maturity. So you would know, various people who can interpret those things with less risk of getting it wrong, as opposed to myself probably jumping straight in and deciding that I know whether a tech piece has met our compliance. But those people are rare. So they can’t be across every mission at the same time. So again, it’s that risk based approach. But just calling out early, I guess, and learning from our mistakes is probably the most important piece we can only our documentation is pretty clear to say what how we interpret it and the path we went down. It’s more about how we deal with it if that interpretation or path wasn’t ideal. And that’s fast, honest, and straightforward.

 

Fraser Jack 

Yeah. Fantastic. And how do you see the sort of the future panning out when it comes to when it comes to, you know, technology, being able to help people comply easier?

 

Vicky Andrews 

Yeah, so I definitely think it’s a big part of it. But obviously, data integrity and security. We don’t want the manipulation of any of that to make compliance, you know, sort of an easy way around. So I think it’s going to be security of all our platforms, will be the number one piece.

 

Fraser Jack 

Fantastic. Thank you, Vicki. We look forward to catching you in the next episode.

 

Vicky Andrews 

Thank you, Fraser.

 

Fraser Jack 

Welcome back, Ivan.

 

Ivon Gower 

Thanks, Fraser.

 

Fraser Jack 

fantastic to have you here. Now we’re talking all things compliance from different aspects and points of view. It’s obviously a huge part of everything that that you do in your role. You know, we’ve got different levels of compliance. It seems to take up a huge amount of people’s time for what than the advice industry especially tell us about how important it is with you.

 

Ivon Gower 

It is important, there’s no there’s no doubt, compliance is a sort of necessary part of business right? And the challenge for us is to try To find a way to make compliance efficient, without undermining the the kind of basis behind why regulations have been put in place. So I think, for instance, you you often see regulations come up that drive changes to, to the way we do things. And the purpose of them is to, is to change behaviors, to to make sure that we do adapt, and we don’t take shortcuts and undertake due diligence. So from a technology perspective, we need to facilitate that change of behavior rather than shortcutting it rather than automating it. And so I think from a user perspective, we often find that there’s a change in some kind of compliance, and now users will hope for no impact on efficiency are no impact on process, and we have to work with them to to help them sort of understand that we will have to tweak a process, we’ll have to change something, because we, you know, we need to send them down a slightly different path so that they can adhere to new changes coming through.

 

Fraser Jack 

Exactly. And I love the idea of leaning into this, as you know, from software from from an advisor point of view from, you know, just be able to say great, how can we, how can we implement things in a process or a system that help us, you know, be compliant, that they provide us with a greater level of compliance. I love the concept of, you know, the key risk indicators, for example of the guide rails, and then financial planning software software, if we’ve got structured data can then start looking at putting guardrails in place to say, you know, If This Then That, having some ideas that say, you know, if this particular type of clients getting this particular type of product, maybe that might sit with a, you know, a standard deviation outside of the normal, or whatever it might be. Tell us about where that sort of where that’s up to?

 

Ivon Gower 

Well, I love data, right, we talked about or talked about my, my sort of fascination with what we can do with the information that we’re putting into the system, the opportunities I see for, for data to, to raise flags, in real time for users. You know, in times past, when you don’t have the power of data to support analysis, you restrict users from doing things. And that can really slow things down where there’s a situation outside of the norm. So for instance, instance us sort of said, Here’s your approved product list, you can’t recommend anything that’s not on that IPO. Now, there’s valid circumstances where you will want to recommend something that’s not on an IPL. If a system is too restrictive, all of a sudden, you’ve really slowed the user down and stop them from moving any further. On the other hand, if there’s nothing to flag it for them, then you can have people with the very best intentions making, there could be negligent errors, or they could just be sort of misinterpreting some policy information that the licensees released or that they’re trying to work by. So having these flags in place, being able to understand what people are doing, and then sort of say, you’ve just gone outside that flag, you’ve just recommended a product that’s not on the IPO. Just drop a file noting right and you get a message you pop a file note in and that can then you can continue on with the advice and that paper trail, which I think is the key for full compliance, being able to sort of tell that story around how you’ve gone from A to B and recommended a certain strategy for clients that’s in place. You know, if you dovetail that into the whole compliance and risk management framework for a licensee, then you can start to sort of show them, these are the flags that have come up, and these are how people have addressed them. And they might be able to review those responses, address anything that’s that is inappropriate, but also look at the way that they are communicating their policies and their guidelines to users so that they can reinforce some of the things that that people might be getting wrong. And I feel that’s a really sort of positive and proactive way of helping people understand the boundaries they’re working in and at the same time, not slowing them down from their process.

 

Fraser Jack 

Yeah 100% agree Yeah, you know that their concept of being able to do still do stuff but um, but you know, be able to create that Why did you do it that way? messaging along the way, really, you know, the, the ultimate here would be that not have to worry about all the remediation stuff that took place over many years. Because the software is you know, flagging things along the way that whatever it might be, and as you said, there’s there’s also the oversight type conversation when it comes to is, you know, it it’s kind of like a little bit of an oversight that from the software, but then it might flag a human conversation.

 

Ivon Gower 

It I totally agree. And I think it’s, you know, what approach? What approach Are we going to take to managing compliance? Are we going to focus on the fact that people are inherently bad, and we need to stop them from doing bad things? Or are we going to acknowledge that people are good, and they sometimes make mistakes. And I think if you take the latter approach, then you can really support the, the the advice process without slowing it down, and help it continue to improve.

 

Fraser Jack 

Yeah, I couldn’t agree more. And I love I love what you said before about the paper trail, the data trails, and that sort of the data, the data will tell a story, the data will provide the proof of what happened and when it happened. And that’s the beauty of using a system rather than just relying on somebody would necessarily tell us about security, security is sort of a big thing for a lot of people just making sure that, you know, the old days of locking, locking the file, filing cabinet was locking it into a locked office, and some people then even from a client point of view, we always worry about where we putting our data,

 

Ivon Gower 

we absolutely do. And I’m sure a lot of advisors would have experiences of clients who are very, very protective of their data and want to make sure that it’s tightly controlled. And of course, in Australia, we have very, very tight privacy laws and all sorts of regulation around what you can do and how you can how you can use data and how you need to protect it. It’s something that sitting inside a technology business, we are always undertake undertaking ongoing information security training, lots of tests, lots of audits, lots of reviews of processes and and, you know, that is designed for the, for the greater good to protect people’s data. We do of course, have some really rigorous processes around what happens if there’s a data breach, and how do we go about reporting rectifying and, and removing the risk of that happening again, ironically, though, we’re doing a lot of work at the, at the sort of back end of this process. And then at the front end of the process, there’s plenty of advisors who aren’t necessarily taking that same level of protection, you know, they’ve they’ve got a license to an application and an external paraplanning uses that license to jump in, and, and do some power planning work or something like that. So it’s something that I think we we need to be mindful of throughout the industry. And it’s got to work all the way through the process where where we are aware of the data people are sharing with us and the consequences of it getting, getting picked up or, or showing to other people.

 

Fraser Jack 

Yeah, the shared log and things interesting, isn’t it, because it’s sort of it’s, it’s tempting, but it’s also a massive risk.

 

Ivon Gower 

It’s like every risk, you don’t necessarily see it as important until all of a sudden, it really is. And more and more, we’re seeing evidence of, you know, phishing activity that captures people’s data and might be isolated to a single incident, or may end up sort of picking up passwords and getting getting into applications or email systems or something like that. And once that happens, you know, those, those cases where people have their Dropbox usage locked, and they can’t access it, the ransomware stuff, it’s really frightening, and it really has an impact on a business. So this is something that I think everyone really needs to be aware of, and at a at a sort of individual business level, reinforcing that protection of data. And, you know, sensible use of it sounds a bit boring, right? But sensible use of technology so that you’re not exposing your clients information to any of these risks,

 

Fraser Jack 

yet, certainly is certainly as a worry for some clients, but I think you’re absolutely right, you know, for advisors to be taking, taking a bit, you know, fairly seriously is a must talk to us about the concept of, you know, the cost of the cost of compliance versus you know, that the whole idea that we’re talking about today is around efficiency. And I should be people be trading the cost involved with, you know, being compliant,

 

Ivon Gower 

I feel one of the biggest inefficiencies with compliance is that sort of lack of clarity around what the rules are. So I would say one of the best ways to address the cost of compliance is to really be sure about what you need to do. Because I feel like when you talk to various people throughout the industry, they interpret regulation and compliance. And then add on a little bit of extra to be on the safe side. And as that filters down and down and down, all of a sudden, that little bit extra, that’s added On at every step of the process can become quite time consuming and can become a real cost within a practice. So understanding what you can do, and understanding the difference between, this is what I need to do to be compliant. And then this is what I want to do to add a great customer experience. And that’s totally valid. But, you know, if an SLA is taking you, I don’t know, 10 hours to write from start to finish, how much of that is compliance? And how much of that is is value add? And how can you start to try to reduce the time that you’re spending without impacting the client experience throughout that, and while obviously maintaining your diligent approach to compliance? Yeah, that

 

Fraser Jack 

what you’re saying gets me a little bit wound up with all the different versions of VSOs. And the different versions of the interpretations? It, it’s certainly frustrating from, from any point of view, I think it’s probably very frustrating from from a software technology point of view, trying to build something when you when there’s so many different ideas of the rules. Yeah, and

 

Ivon Gower 

I mean, a really good approach to, to sort of working through that is to talk to your provider around, you know, what they recommend you do to solve a problem, because they’re building features and processes and functionality to to solve the same problem that you’re trying to try to solve. But some people will fall into the trap of approaching approaching that, that challenge with here’s what I do, how can the technology make that work? Right, so this is a square peg going into a round hole, as opposed to saying, This is what the technology wants me to do? How can I adapt and adopt that. So I can still provide a, you know, a great client experience, I can still be efficient, but I’m kind of leveraging the, the best practice approach to the tech over the long term, that kind of solution is really going to pay off, you know, that these days, we, we tend to configure technology more than customize it. You know, many years ago, we would take a piece of tech and we would say how can we bend this, so then it works for my processes. And nowadays, you want to configure you want to understand how it works, and then try and tweak that configuration. Because as the software evolves, and we keep building on it, that’s the path that’s going to take, maintaining the customized version of something can really become costly and create risks down the track. Yeah, I

 

Fraser Jack 

couldn’t agree more. So a little bit of flexibilities required from from the advisors point of view, and basically the licensees point of view. Now if we have a blank sheet of paper, we could create some some, you know, some future ideas around what what compliance or technology could look like, where would we go?

 

Ivon Gower 

My answer is always going to come back to data Fraser, I that that is where we can really leverage what’s going on in the system, we can report on how people are using this technology, we can raise those flags, we can analyze it and we can we can proactively make sure that people are working in the clients best interests. And I think as we’re doing that, as you encourage people to, to kind of follow that process and keep the data in the system. The more data we have, the better we can service clients, the better we can analyze our businesses and start to understand that, you know, these are the these are the clients who are generating the most revenue for us. These are clients who we’re spending a lot of time on, but not necessarily generating enough revenue to cover our costs. How can we improve our business? Where are we? Where are we finding efficiencies? And then how can we service clients better. And I think that I love the idea of being able to use what information is in the database to identify opportunities for clients, anyone who has a client coming into the office, we’ll either sit down or we’ll get a support staff member to sit down and go through that client file and sort of say, Well, how are we going? What can we do? Where should we be? Where should we be directing this client towards? We could do that in real time. That’s That’s for me the big opportunity across the industry.

 

Fraser Jack 

Yeah, I couldn’t agree more, you know, not just it’s not just about identifying opportunities, but also about identifying those risks if he thinks something’s coming up and you whether it be a you know, you see clients going on a there’s a notice that comes in saying clients have been on a spending spree pillar last three months might need a conversation through to, you know, although you know, they’ve canceled something or not paid for something and in the plane is now coming out of whack. So I think I think there’s plenty of opportunity in that space, as the software builds out. And as you said, I think the key to that is getting as much data structured data and there’s a weekend. Agree, Agree, Ivan, thanks for catching up in this episode. Let’s catch up again. Very shortly we’ll be talking about change management.

 

Ivon Gower 

Sounds good. Thanks, Fraser.

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