Monday, November 20, 2017

Keeping Good Records is Good Business

Keeping Good Records is Good Business

Maintaining good records is important to help meet your business and legal obligations. The right record keeping system not only helps satisfy these obligations, but it may save you money and time. Here’s what to consider for your record-keeping system.

Regulator has not given specific guidance as to the records that must be kept. Given that, everything that might be needed to demonstrate that the client’s best interests have been served should be kept on file.

‘If in doubt, keep it on file’ is the basic proposition when it comes to client records.

What Records Do You Need to Keep?

The first step is identifying the records you need to maintain. The obvious examples include leases, contracts, payroll and personnel records, and a range of accounting and finance information, such as invoices, receipts, payables, and inventory.

Second Step is to identifying your business needs as far as investment and insurance agents. I suggest keep clients primary details like name , address, date of birth, place of birth, family members details, marriage anniversary, family income, pan number, aadhaar number, bank details. After taking consent from client keep records of investment folios and insurance policy and any other info client want you to know.

Third Step is to identifying clients consent and his need how client want you to help him for example he want you to call when insurance premiums are due, he want you to call when his investment are getting matured or any specific need of client. I suggest as an agent you should provide service like reminder on due, assist client for maturity of investment, product information, wish them on birthday, anniversary, compliments on new situation like house upgrade, new car, clients child’s achievement, new job etc.

Forth step is to ensure that records of the following matters are kept in relation to the provision of the personal advice:
  • to prove that the best interests duty has been satisfied—the information relied on and the action taken by the provider that satisfies the steps in that subsection;
  • the advice given, including the reasons why it would be reasonable to conclude that the advice is appropriate to the client, had the provider satisfied the best interests duty;
  • Where the provider knows, or reasonably ought to know, that there is a conflict between the interests of the client and the interests of an adviser the information relied on and the action taken by the provider to indicate that the provider has given priority to the client’s interests when giving the advice.
  • Must keep the records required for 7 years after the day the personal advice was provided to the client.
  • One of the simplest ways to ensure that all relevant records are kept is to use checklists. A checklist allows the user to systematically ensure that they have kept a record of everything that needs to be contained within a client file. 
  • The checklist, with some sample data included, includes everything that client file should contain, from the time when the client is first contacted and provided with a financial services guide to the time when the client signs their authority to proceed. It also covers all correspondence after that. The checklist looks like this:
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In ‘the old days,’ when all files were made of paper, the simple way to proceed was to staple a checklist like this to the inside of the file used to hold the client’s information. These days, with digital files, the concept is still the same, but the process of keeping the checklist is perhaps the only part of the file-keeping process that has become less efficient with digitisation.

But it is not that much less efficient. In this digital age, the best way to ensure adequate record keeping is to save a blank copy of the client file checklist within each client file when that file is first created. Whenever the file is added to, it is then simply a matter of checking the checklist to see if it too needs updating.

For example, when a client first makes contact and the practice sends that client a copy of the 
fact finders sheet (FFS), the email containing the FFS should be saved within the client file. At the same time, the checklist is updated to show that this has been done, as in the example above.

A source document is essentially an original document. (In strictness, it is the document from which the relevant information is initially sourced). Whenever possible, a source document should be held on the client file. Critical details like pan no, aadhar no, bank details etc. 

Best practice states that the adviser should have a copy of the original document wherever possible. A good example relates to a client’s fact finders ask the client to nominate the name of their fund and the balance held within it. This is a good record, especially when the client has completed the fact finder themselves. But having a copy of the most recent statement – the document from which the client has sourced the information about their balance – is even better. Clients can misread their own statements, or be providing old data from a statement, etc.

getting access to source documents is critical in minimising mistakes. Clients will sometimes become confused or even tell you things that are not true. ‘Garbage in, garbage out:’ If you base your work on flawed data, then you run the risk of later being accused of providing inadequate advice. Gaining access to source documents is the best way to avoid this risk.


Fifth step please consult a professional with tax expertise regarding your individual situation.

How Do You Want to Keep Them?
Record maintenance can take three basic forms:
·         Paper-basedIt’s old school, but maintaining records in file folders stored in a metal cabinet may be sufficient. However, there is a risk of files being damaged or destroyed with no back-up.
·         Computer-basedmaintaining records on computers saves space and makes management easier. Consider backing up files and keeping them off-site.
·         Cloud computingStoring and managing records on the internet offers possible savings on software, reduces the risk of lost data, and provides access from any location.
What Software Should You Use?
The right software can make life more productive; the wrong software may cost you time and money.

When shopping for software, consider:
·         What is the size of your organisation? Do you want an easy-to-use package, or are you able to hire a dedicated employee to take advantage of a more sophisticated alternative?
·         What sort of training and support is provided? Without the right measure of either, your software may not be the productivity tool you envisioned.
·         Is specialized software available? The needs of different professions can vary greatly. Specialised software may have capabilities not available with more generic software.

·         Do you need mobile capabilities? If you operate your business from the road, you may want your software to have robust mobile features.

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