How advisors can meet their new client-focused reform obligations efficiently and effectively

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Focusing on how to build a better practice and grow your client base is usually top of mind for advisors this time of year. But the implementation of new client-focused reforms (CFRs) has put an even greater focus on how advisors will meet the new obligations and be able to manage all their other responsibilities successfully.

Globe Advisor editor Pablo Fuchs spoke with former advisor and portfolio manager Christine Timms on how advisors can tackle the new regulations in a way that makes sense for their practices.

What are some of the things advisors can do to help minimize the impact related to the new demands the client-focused reforms have placed on them?

The new CFRs demands seem to be coming constantly and advisors need to devise ways to meet their obligations effectively and efficiently and preferably behind the scenes.

The solution lies in being able to delegate as much as possible to team members and through creating processes including templates, macros, and checklists to minimize those repetitive tasks that don’t really benefit the client.

For example, if advisors are recommending a particular stock or mutual fund to their clients, they could have a prepared checklist, macro of what they’ll say, and tick off the box as they say it – reducing the time it takes to write a note greatly.

The more processes you have, the easier it is to delegate and supervise to ensure compliance. Sometimes, advisors can turn the compliance requirements to their advantage in their explanations to clients.

For the know-your-product requirements, you can remind your clients how you narrow down and select investment choices for them. You’re likely already doing what the CFRs want, but now you’re making your processes more visible to clients and compliance.

For the know-your-client (KYC) requirements, you can tell your clients that regulators are concerned, and probably rightly so, that some clients are not keeping their advisors up-to-date on changes to their situation and risk tolerance. Regulators are requiring proof that clients confirm those things more often.

How can advisors delegate to their teams so there’s a greater focus, from the whole organization, on finding the right balance between addressing the regulatory requirements and meeting clients’ needs?

You want your team to take care of as many of the behind-the-scenes activities as possible. Sometimes, that means involving them in more stuff. For example, including a team member in client review meetings means they can take notes and send out the updated KYC documents without further involvement from the advisor.

Other things that can be delegated include administration activities such as preparation of newsletters and investment updates, investment research and screening, entering information into financial planning software, identifying insurance opportunities, tax preparation, and many more things.

This excerpt from a Globe Advisor LinkedIn Live event this week has been edited and condensed. The entire interview can be viewed here.

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