Will financial advisers be made to record client meetings?

Recording conversations with clients has plenty of great benefits for advisers and customers, and the technology has never been more accesible. Are regulators likely to make it a requirement?
Microphone recording Recordsure

In a speech at the Money Marketing Interactive Conference 2019, Debbie Gupta, director of life insurance and financial advice supervision at the FCA, talked about the current suitability of financial advice.

One of the focuses of the speech was that, to provide the most appropriate and useful advice, an adviser needs to really know their client. And among discussion of market data and regulatory focus, Gupta made a recommendation that did not go unnoticed.

A practical way for advisers to understand their clients, she said, is to record client interactions.

This suggestion of making recordings of conversations has had a slightly fraught history, with the FCA withdrawing its plans to make advisers tape their phone conversations, following an outcry from the industry.

But now this suggestion is back on the table. Gupta was keen to emphasise that this is by no means a requirement. But, she said, firms who have recorded customer meetings have seen better outcomes and given better advice.

Why record meetings?

While the attempts to get advisers to make recordings of meetings has caused controversy in the past, it’s clear why the regulator continues to promote the approach.

Having verbatim, detailed evidence of conversations can serve an adviser well if they’re faced with a complaint in the future. Not only can it prove the adviser was doing the right thing, it gives essential context to explain the recommendations clients were given.

A more accurate portrayal of the client also leads to better advice. ‘This is because’ Gupta pointed out ‘the adviser could understand and empathise with the client and tailor the advice to the individual client.’

But it’s not just about audit trails and getting in the clients’ head. Conversations are better when you’re not trying to scribble notes throughout them or clutching at details to write down later. And better conversations make for better customer service.

Progression in tech

As the technology to make these kinds of recordings progresses, so does it become more and more accessible to advisers and firms of all sizes. IFAs and small firms are no longer excluded from being able to carry out this kind of record keeping practice.

There was a time when recording meetings would require specialist equipment and resources which were only available to larger organisations. But today everyone now carries a quality microphone with them at all times in their smartphone. Things have changed.

In some respects smaller firms are actually better positioned when it comes to recording meetings. They are far less affected by a challenge which plagues large organisations: how do you manage, process and monitor data on an industrial scale?

Luckily further tech advances – Recordsure being a prime example – not only make this possible but allow organisations to uncover commercial insights. It’s not just a case of recording conversations to use to demonstrate compliance, but having the ability to see what’s happening across a breadth of interactions, and acting on it.

Recording meetings isn’t just important for evidencing, accuracy and improving customer service. When done on a larger scale it empowers firms to spot trends, issues and opportunities to develop staff and improve commercial outcomes.

What’s next?

Though there’s no immediate indication that the regulator will implement requirements for advisers to record all customer conversations, the reappearance of this suggestion is worth paying attention to.

As tech solutions become ever more accessible and easier to use, and as their use continues to demonstrate improved customer outcomes, could Gupta’s suggestion be an early indicator of wider FCA changes to come?

Worldwide, multiple regulators have suggested that as new tools become available they will be increasingly asking firms why they are not taking advantage of them. With regulators and consumers alike demanding improved transparency, risk management and customer outcomes, it seems inevitable that regulations will need to evolve in order to keep up.

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