A familiar file-review scenario shows why having the documents is not always the same as having a clear record of the advice.
Monday morning: a routine file check
The client file appeared ready to close. The fact find was saved. The quotes and comparison reports were there. The disclosure document had been sent, and the signed recommendation document was on file. At first glance, nothing obvious was missing.
Then came a straightforward question: why was this recommendation made?
The adviser knew the answer immediately. During the meeting, the client had been clear that keeping premiums manageable mattered more than maximising every benefit. One option had been set aside because it did not fit the client’s budget. Another had been adjusted after a discussion about existing cover through work.
The problem was not the advice. The problem was that much of the reasoning still lived in the adviser’s memory.
What another reviewer could actually see
Someone opening the file months later could see the final recommendation, but not the conversation that shaped it. There was no clear note explaining the trade-offs, the option the client declined, or the reason the recommended level of cover was considered appropriate for that client.
That gap matters. A client file may later be read by another adviser, a compliance officer, the FMA, or a dispute resolution body. None of them were in the meeting. The record has to stand on its own.
The administrator’s role in this scenario
A trained administrator should not decide whether the recommendation was suitable. That judgment belongs to the adviser or another properly authorised person. What the administrator can do is notice that the file does not yet explain itself.
A simple query back to the adviser can be enough: “The recommendation is saved, but I cannot see the note explaining why Option B was selected over Option A. Can you please add the rationale before we close the file?”
That one check is very different from giving advice. It is an administrative quality-control step that helps the adviser complete the record while the conversation is still fresh.
Why fixing it later is harder
If the gap is found six months later, the adviser may need to search old emails and reconstruct the discussion. The client’s circumstances may have changed. People remember the outcome, but not always the detail that led to it.
The standard conditions for full FAP licences require records of regulated financial advice and records showing how the financial advice duties were met. The FMA’s monitoring insights have also highlighted situations where regulated advice was not correctly recognised and an advice process was not followed. These obligations are the regulatory backdrop, but the practical lesson is simpler: record the reasoning when it happens.
A-Perform can support this process through agreed file checks, consistent naming and filing, CRM updates, missing-document follow-ups, and clear escalation back to the adviser. The adviser still owns the advice, professional judgment, and final sign-off.
Practical takeaway
Try the “new reviewer” test. Open a recently completed file and read it as though you have never met the client. If you need the adviser beside you to explain why the recommendation was made, the story is not yet complete.
Sources
Financial Markets Authority, Standard Conditions for Full FAP Licences: https://www.fma.govt.nz/assets/Licensing-guides/Standard-Conditions-for-full-FAP-licences.pdf
Financial Markets Authority, Financial Advice Provider Monitoring Insights, 30 May 2024: https://www.fma.govt.nz/assets/Reports/Financial-Advice-Provider-Monitoring-Insights.pdf
General industry information only. Not legal, compliance, or financial advice.
