You will be able to describe the questions a reviewer asks when reading a case file.
Imagine you are the reviewer. On your desk is a case file for a client you have never met, sold by a representative you may not know. You cannot ask anyone what they meant. All you have is the paper, and a short list of questions you have to answer about it. Once you can ask those questions of your own files, you will start writing files that answer them.
Reviewers work from their firm's checklist and the measures their firm applies, and the exact wording varies. But the questions underneath are much the same everywhere, because they come from the same rules you have studied in modules 2 to 4. There are four.
The reviewer starts with the fact-find, because everything else depends on it. A form with every box filled in can still fall short here, since what the reviewer wants to know is whether it holds what the recommendation needed.
For life cover, that means the client's dependants, debts, income and existing cover, with group cover among them. For an investment, it means their objectives, time horizon, risk profile, other assets and how much they could afford to lose. In both cases the cash flow has to be there to support the affordability claim. If information was declined, is that recorded, along with its effect on the advice?
A fact-find can be long and still fail this test, if the parts the recommendation rests on are missing. It can be short and pass it, if everything relevant is there.
Next, the reviewer reads the recommendation against the needs analysis. They want to see the product answering a need the client actually has, ranked in a sensible order, with an amount the figures can justify. And they want the reasoning written down in a way that belongs to this client, rather than a sentence that could sit in any file.
They also look for alternatives. If the file shows one product and no sign that anything else was considered, the reviewer cannot tell whether you compared options. Lesson 4.1, What a reasonable basis looks like on paper, set out what a rationale needs: the need, the product, the reason, the alternatives and affordability. The reviewer is checking each of those.
Third, disclosure. Did the client receive the required documents, and when? Were the material features, costs and risks explained, including exclusions, charges and what happens on early exit? And is there any evidence the client understood, beyond a signature?
This is where the habits from lesson 4.2, Disclosure the client actually understands, pay off. A file that records the client's own explanation of what they bought is far stronger than one that relies on a signed declaration. The reviewer will also look at whether anything that should have been disclosed, such as a conflict or a replacement disadvantage, was left out.
The last question is whether the file is consistent with what the client experienced. Reviewers look at dates, signatures and sequence. Was the fact-find signed before the recommendation, or on the same page at the same moment? Do the dates on the documents make sense together? Do the signatures match?
Firms may also check with the client directly, for example by phone, about what happened in the meeting, and listen to recorded calls where they exist. A file that says the client understood the surrender terms is undermined if the client tells the firm nobody mentioned them. So is a fact-find dated before the meeting that, according to the client, happened a week later.
This question catches the files that were written to look right rather than to record what happened. It is also why writing your notes on the day matters so much, as lesson 5.3, Common file faults and how to avoid them, explains.
The four questions are a good start, but a checklist needs items you can tick or cross for a specific file. Break each question into the things a reviewer would look for, and borrow the wording from your own firm's forms and requirements where you can.
Wei Ling's checklist has twelve items under the four questions. Under the first, for example: dependants recorded, debts recorded, existing cover listed including group cover, cash flow complete, declined information recorded with its effect. The fourth question becomes three checks on dates, signatures and when the notes were written.
Then she tests one recent file against it. It passes ten of the twelve. The two misses are a rationale with no alternatives and a disclosure record with only a signature, which happen to be two of the three faults her supervisor said were most common.
In the activity below you build your own checklist from the four questions and test one of your recent or practice files against it.
Turn the reviewer's questions into a checklist and test one of your recent or practice files against it.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).