Protect yourself and your business: Sound business practices for keeping accurate records

Keeping accurate records about your clients is of the utmost importance in an advisor’s practice. Client complaints are on the rise, so having proper records and documentation is the best defence if there are ever any questions about your actions.

Maintaining detailed notes about your client can be of great value. If you have taken written notes in a meeting, it is admissible as evidence if you ever need to defend yourself. It is critical to take notes at the time of any client conversation with no time lapse.

Consistent contemporaneous note-taking can be done by an individual advisor and/or as a team. When done as a team it not only provides protection but it increases communication among team members.

Below is some practical advice for maintaining accurate notes and records:

When to keep notes Keep notes anytime you have a conversation with a client. Whether it is an outbound call, an inbound call or an annual review, you should be keeping notes. Not only are you covering yourself and your business but taking notes when a client is discussing their goals and objectives demonstrates that you’re listening and that you are valuing their business.

Include the date and time Keep notes in the client file or client record. You may be keeping notes in a contact management system but keeping a printout of these notes can be helpful. Regardless of where you keep this information, notes should include the date and time of the conversation. This allows you, your associate and your team to keep abreast of your client’s activities and will assist you in dealing with client requests, interests and issues in a timely manner.

Use a template It is useful to have a template form or worksheet for note-taking when meeting or having phone conversations with clients. This will allow you to capture your conversation and prompt specific questions. The template would have the client name, date and time of the meeting for record-keeping purposes. In addition to a section for jotting down notes you may also want to include sections for discussion points to raise during the conversation, items to follow up on and when to schedule the next meeting date.

Each time notes have been taken on the template it can be placed in the client file. Your written notes are more accurate and reliable than the notes that are subsequently dictated or typed afterwards. However, if you’re keeping notes in your contact management system you could add as little as “see attached notes.” Or alternatively you can add the key elements in your system for other team members to view and keep the detailed notes in the client file.

Follow up Clients tend not to take notes as they rely on their memory — be sure you are not doing the same thing. Send out a recap letter to clients after a significant client meeting highlighting key discussion points and actions for the future.

Complete and update all documentation Client documentation should not be any older than two years and should be reviewed annually to reflect any changes in your clients’ situation. Accurate “Know Your Client” forms are an advisor’s best ally.

You can simply send out a letter to your clients asking for the necessary information and stating:

To ensure that we provide you with the best service and to comply with regulatory requirements, it is necessary for us to occasionally update your financial information. This information helps to make sure that your investments are in line with your financial needs and goals… please update and send back this information to our office.

Accurate note-taking and up-to-date client documents are your keys to being covered. So take time to review your business and the records you keep on clients and client conversations. You should have clear processes to follow to ensure this is taking place.

The true benefits of this consistent note-taking are enhanced communication within your own team, detailed notes for compliance and having your last conversation dated and time-stamped in your contact management system or in the client file, allowing you the ability to locate a specific date of a client conversation. I often hear from advisors that capturing notes for every client conversation was the best thing the team ever did.

Joanne Ferguson is a partner with Ontario-based Advisor Pathways, a company that offers consulting and coaching help to advisors and their firms across North America. Joanne can be reached at jferguson@advisorpathways.com or through her company’s Web site at www.advisorpathways.com.

(07/14/06)