FCA regulated firms offering advice to clients face a range of risks. Typically, these are mitigated by a robust client file review process.
This can be done manually and inefficiently, with difficult to access MI and too much time spent on managing spreadsheets and process and data administration. Or, it can be done efficiently, where your team’s time is spent doing what adds most value.
Traditional File Review Processes
Traditionally, file reviews involve a detailed manual assessment of the advice process, client interactions, and the final recommendations made. This process includes:
- Planning the review sample and allocating to reviewers; often manually.
- Structured review and analysis of the client file against a pre-established ‘marking’ process by expert reviewers.
- Feedback to the adviser with the results and corrective and preventative actions where necessary.
- Record-Keeping. Maintaining comprehensive records of the review process for auditing and regulatory purposes.
- Quality Assurance. Sample based reviews-of-reviews by expert or independent reviewers.
- Generating MI. Manipulating results data to generate meaningful intelligence for a range of stakeholders.
- To make it work: managing data and spreadsheets and chasing colleagues to get their actions completed.
While thorough, this manual process can be time-consuming and resource-intensive. It’s prone to human error and is challenging to scale up in larger organisations.
Here are some tips to generate a process that works for the business, not against it.
Strategies to Streamline Your File Review Process
- Lose your fear of change. The file review process is so central to many companies that they are frightened to change it. Take some time out to assess how much resource is spent on the administration aspect of your process (and work out the cost of that). Assess what the cost is of not having meaningful MI. And then look for allies internally to support a better process. Trial it initially on a small scale and prove to yourself that there is a better way. Then you can have the confidence to champion it internally.
- Develop a consistent methodology and consider implementing a numerical scoring system, if you don’t have one. Ensure it is easy to compare the results and underlying trends of different reviewers. Have flexibility in the questions you ask in your reviews, how they are assessed and enable “auto fails” against key risks – without asking too much of reviewers.
- Make the assignment and progress tracking of file reviews easy. Ensure your system tells you by exception the progress of all outstanding work.
- Make the assignment and tracking of preventative and corrective actions easy. Your system should assign the actions from within the review and you should only need to think about them by exception.
- Ensure the QA process is fully integrated. Use the same processes to distribute reviews and actions and to track progress.
- If you use external consultants, ensure they can be fully integrated into the process without extra effort. Enable multiple consultants to work independently if you want to.
Deliver insightful management information for all stakeholders at the point it is needed:
- For advisers to see their results and trends.
- For managers. To empower them to understand their team’s performance and drivers of success/failure.
- For the board to understand risks and how they are being mitigated.
- For yourself, to understand how compliance is delivering an empowering and efficient process.
- How do achieve all this? By leveraging focused technology.
Conclusion
File reviews are an expensive process with huge implications for all stakeholders – including the consumers you have a duty to protect.
Streamlining the process allows you to save huge amounts of time, enhance your process, deliver better MI and reduce the risks to the business. There is not a lot not to like!
To find out how My Compliance Centre’s FileChecker module can assist you deliver all this and more.