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Adviser Workshop: How to change your terms of business

They are some of the most important documents you show your clients. But how do you change them and keep everyone happy in the process? Christine Dawson investigates.

Marco says...

We are regularly changing the layout of our terms of business to make them more client-friendly. Although they can be horrible documents, we like clients to understand what they are signing.

If you do not look at them until you have to, everything becomes a pain in the backside.

Terms of business should be evolving documents. They are reviewed regularly. But other than presentation tweaks, there is no need to make wholesale changes unless regulation requires it.

 We have two terms of business documents. One is the document for client protection. It includes things such as data protection and Financial Services Compensation Scheme information. The second one details our fees.

If I sent a client an eight-page document, they may be annoyed. Instead, one of the documents is three pages and the other is four pages. This way, they are more likely to read one on the train home and the other while the pasta is boiling. It is better for the client if the documents are bite-sized.

Top quote: 'Try to view the documents from a client’s perspective. I often ask friends or family members to read them and tell me what they do or do not understand.' 

Top tip: Get friends and family to look over revised terms of business documents. Ask for their view, and if there is anything they do not understand.

Marco Vallone is director at Brighton Financial

Marco says...

We are regularly changing the layout of our terms of business to make them more client-friendly. Although they can be horrible documents, we like clients to understand what they are signing.

If you do not look at them until you have to, everything becomes a pain in the backside.

Terms of business should be evolving documents. They are reviewed regularly. But other than presentation tweaks, there is no need to make wholesale changes unless regulation requires it.

 We have two terms of business documents. One is the document for client protection. It includes things such as data protection and Financial Services Compensation Scheme information. The second one details our fees.

If I sent a client an eight-page document, they may be annoyed. Instead, one of the documents is three pages and the other is four pages. This way, they are more likely to read one on the train home and the other while the pasta is boiling. It is better for the client if the documents are bite-sized.

Top quote: 'Try to view the documents from a client’s perspective. I often ask friends or family members to read them and tell me what they do or do not understand.' 

Top tip: Get friends and family to look over revised terms of business documents. Ask for their view, and if there is anything they do not understand.

Marco Vallone is director at Brighton Financial

Gretchen says...

We have recently revised terms of business in line with Mifid II and in advance of the general data protection regulation (GDPR). Knowing there were two pieces of legislation that required changes, we wanted to only make one revision. With one document, we could knock both of those on the head. From a GDPR point of view, we are ahead of the game.

We wanted to make it as watertight as possible. Hopefully we will not have to undergo the process for a while.

We use support services provider Threesixty for compliance support. Its guidance is good for when you need to update your terms of business. Some changes are probably more vital than others. If it is something we have chosen to adjust, off our own backs, the revised documents could be issued at the next client review. It can be handled efficiently and signed by the client while you are with them.

Some firms are doing this electronically using Adobe Sign, for example. That would work for around 70% of our clients. But the rest do not want to use that kind of technology. Despite being more of an administrative burden, we have kept to the postal system. It is easier to ignore an email than something that comes through your door.

Top quote: 'If there are big regulatory changes, like what we have seen this year, we post those out to clients to sign and return.'

Top tip: Try to keep ahead of regulatory changes to avoid revising terms of business more times than necessary.

 

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