Planning file notes ‘solid gold’ against disputes

Financial planners are being urged to be innovative when it comes to record keeping as the bulk of Australian Financial Complaints Authority (AFCA) complaints about planners involve incomplete record keeping, according to the Financial Planning Association (FPA).

The FPA released new guidance for planners on how to better manage record keeping and said planners could include a number of apps that captured client communications using video or audio recordings that they could convert to text such as OneNote, Notability, and Evernote.

FPA chief executive, Dante De Gori, said detailed file notes were one of the biggest factors that helped defend financial planners

“Unfortunately, in a dispute, the file is going to be the enduring evidence of the financial advice a planner has provided. It needs to tell the whole story,” he said.

“File notes no longer need to be paper-based. There are new and more efficient ways for financial planners to build a proper audit trail through effective record keeping.

“This not only gives greater clarity around why decisions are made but could be used when supporting evidence is needed.”

The FPA noted in one AFCA case, the contents of their file notes were found to be more persuasive than the client’s recollection of a discussion. In another case, a planner’s file note proved their conduct was consistent with the professional standards and that the appropriate advice was given to the client.

AFCA chief ombudsman, David Locke, said: “Documents created at the same time as the activity or advice in question are usually given more weight than later recollections of what was said or done.

 “This means contemporaneous file notes of conversations and actions are solid gold when a dispute comes to us.”