How advisers can evidence compliance and save time.

A fair deal, suitable advice & cashflow tools

There are two schools of thought when it comes to regulation. Those who believe there isn’t enough regulation of either firms or conduct, and others who feel regulators are overreaching in their approach.

Retirement planning is evolving at a rapid pace and so-called cashflow modelling tools play an important role in the advice process. When we think about how common these tools are and their frequent use in giving recommendations, it is not unreasonable to think of them being regulated in future.

Regardless of your feelings on the subject of regulation, the fact remains that proving full compliance is a huge undertaking for financial advisers. The regulator currently requires a business to provide information on how they assess suitability in retirement planning, where there is evidence of unsuitable recommendations given. Relying on simplistic assumptions to illustrate retirement outcomes is not a good idea; allowing for the likelihood of events like market crashes and their impact on a client’s retirement whilst evidencing such is a reasonable request.

So, what can you to do ensure you’re on your compliance ‘A Game’ without it dominating your office hours and detracting from client time?

Use Timeline to do the heavy lifting - Evidence and Reporting Output:

  • Timeline uses extensive empirical data to illustrate the key retirement income risks that clients face i.e. longevity, inflation and investment risks, helping advisers to make suitable recommendations and ensure their client’s knowledge, financial situation and investment objectives are documented.
  • By using Timeline advisers can ensure they obtain relevant information to ensure a ‘reasonable basis’ on which a product or strategy can be recommended to meet their investment objectives.
  • Timeline’s Withdrawal Policy Statement enables advisers to demonstrate and document how the recommended strategy meets the client’s objectives. Including where the client elects to take income withdrawals, an uncrystallised funds pension lump sum or purchase an annuity.
  • Timeline outputs can ensure firms demonstrate a suitable advice process and suitable conclusions. For example, the Timeline Withdrawal Policy Statement provides valuable information to support ‘evidence based’ advice across key issues such as the required income, reduction in yield and plan success rate.
  • Advisers acting as product distributors can ensure they evidence their comprehensive understanding of the products recommended and have assessed their compatibility with their client’s needs. They can also evidence knowledge and understanding of how the products distributed meet the needs, characteristics and objectives of the ‘target market’.

In short…

Timeline helps you to quickly demonstrate suitability, to provide and retain evidence at the touch of a button, and to give the firm (and the regulator) a clear and complete picture of the firm-wide activity across retirement strategies and/or how solutions meet the clients’ needs.

Retirement planning is evolving at a rapid pace and technology is becoming an integral part of the process. When we think about how common these tools are and the role they play in the advice process, it is only a matter of time before the regulator could potentially become involved in regulating how they are used in the advice journey. Regardless of what school of thought you belong to when it comes to compliance and regulatory issues, it is always better to be safe than sorry.

Toyosi is the Pension & Technical Consultant at Timelineapp. His experience is in Financial Services and consulting (“Big-4”). Toyosi has the IMC qualification and is a member of the CFA Society of the UK and the Chartered Insurance Institute. Toyosi is one of our content contributors and is often writing articles on retirement and the sustainable withdrawal framework.


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