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Focusing on how to build a better practice and grow your client base is usually top of mind for advisors this time of year. But the implementation of new client-focused reforms (CFRs) has put an even greater focus on how advisors will meet the new obligations and be able to manage all their other responsibilities successfully.
Globe Advisor editor Pablo Fuchs spoke with former advisor and portfolio manager Christine Timms on how advisors can tackle the new regulations in a way that makes sense for their practices.
What are some of the things advisors can do to help minimize the impact related to the new demands the client-focused reforms have placed on them?
The new CFRs demands seem to be coming constantly and advisors need to devise ways to meet their obligations effectively and efficiently and preferably behind the scenes.
The solution lies in being able to delegate as much as possible to team members and through creating processes including templates, macros, and checklists to minimize those repetitive tasks that don’t really benefit the client.
For example, if advisors are recommending a particular stock or mutual fund to their clients, they could have a prepared checklist, macro of what they’ll say, and tick off the box as they say it – reducing the time it takes to write a note greatly.
The more processes you have, the easier it is to delegate and supervise to ensure compliance. Sometimes, advisors can turn the compliance requirements to their advantage in their explanations to clients.
For the know-your-product requirements, you can remind your clients how you narrow down and select investment choices for them. You’re likely already doing what the CFRs want, but now you’re making your processes more visible to clients and compliance.
For the know-your-client (KYC) requirements, you can tell your clients that regulators are concerned, and probably rightly so, that some clients are not keeping their advisors up-to-date on changes to their situation and risk tolerance. Regulators are requiring proof that clients confirm those things more often.
How can advisors delegate to their teams so there’s a greater focus, from the whole organization, on finding the right balance between addressing the regulatory requirements and meeting clients’ needs?
You want your team to take care of as many of the behind-the-scenes activities as possible. Sometimes, that means involving them in more stuff. For example, including a team member in client review meetings means they can take notes and send out the updated KYC documents without further involvement from the advisor.
Other things that can be delegated include administration activities such as preparation of newsletters and investment updates, investment research and screening, entering information into financial planning software, identifying insurance opportunities, tax preparation, and many more things.
This excerpt from a Globe Advisor LinkedIn Live event this week has been edited and condensed. The entire interview can be viewed here.
Must-reads from Globe Advisor this week
Strategies, themes, and stock picks for RRSP season
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Not all NFTs are equal – here’s how to guide clients
The low barrier to entry for investing in non-fungible tokens (NFTs) could be dangerous for those with little market knowledge and unable to do the due diligence needed to invest in these digital ownership tokens. Danny Bradbury looks at how they’re created, sold, and how advisors can help clients get exposure with less risk.
Why hope for recovery in the cannabis sector lies in the U.S.
After another painful year for the cannabis sector in 2021, some investors are pinning hope on the fact that pain has already been priced into the stocks and the next move is likely higher. But that depends largely on whether there’s any progress towards decriminalization and legalization in the U.S., according to experts. Adam Mayers explores how the midterm elections could hinder developments, and which producers will come out as winners.
How these top advisors are having an impact on their communities
A lack of diversity continues to be a key issue in the financial industry with many companies taking major steps to encourage inclusion as of late. Barbara Balfour spoke to five of Canada’s Top Wealth Advisors from ethnic minorities about how their experiences have helped them connect with clients in their communities and how that’s shaping the future of the industry from within.
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Why investors are shying away from sustainability
Is now a good time to buy green stocks that are down sharply from their recent highs? Or is sustainable investing, which is a hugely popular theme especially among younger investors, losing its appeal? David Berman reports on the struggling sector and whether the green downturn is a lot worse than what’s happening in the broader market.
Small business owners struggle with cryptocurrencies
A combination of low uptake among customers combined with the logistical and tax challenges in accepting payments have made it difficult for small business owners to conduct commerce in cryptocurrencies. Chris Hannay reports on how risks such as the fluctuating value of cryptocurrencies is preventing wider adoption in this segment of the retail sector.
15 of 2021′s ‘dogs’ that could offer safety and value
Could the worst performers or “dogs” of last year be the best performing equities in 2022? Sean Pugliese of Wickham Investment Counsel Inc. takes a closer look at dogs in the S&P 500 to test his investment philosophy that bets on a rebound this year.
Compiled by Globe Advisor staff