We refer to the article in our March Newsletter and are writing to provide further input on this matter, specifically the aspect of how the required disclosures can be achieved.

There are differing options depending on your modus operandi;

  • Direct marketers (phone)
  • Conventional sales process brokers
  • UMA’s
  • Insurers

 

Direct marketers

The easiest one to deal with. The script used needs to be updated to ensure that the initial opening statement provides a statement that the person calling meets all the required standards. A suggested wording would be;

“….I am an authorised representative (under supervision if that is the case) and meet all the required honesty, integrity and educational standards”

 

Conventional sales process brokers

We are suggesting a multi faceted approach here and two primary options;

1.

  • A full client service level agreement that, amongst other aspects, provides an assurance that all financial services will be provided by authorised representatives who do meet all the required honesty, integrity and educational standards. It will further state that these standards are checked annually.
  • All representatives will update their e-mail and letter signatures to include the following statement;

“I am an authorised representative (under supervision if that is the case) and meet all the required honesty, integrity and educational standards”

  • All other staff will update their e-mail and letter signatures to include the following statement;

“I am not authorised to provide any financial services but do meet the companies honesty and integrity standards”

  • All financial services provided to clients in a face to face environment must include the supplying of the representatives Section 13 certificate (mandate letter) to the client.

 

2.     Where a full service level agreement is not an option for you;

  • A disclosure to all clients, at the initial meeting and then on an annual basis, of all the names of your representatives, their supervision status if applicable and licence categories for which they are authorised together with a statement that all do meet the required honesty, integrity and educational standards. It will further state that these standards are checked annually and an updated list will be provided annually.
  • To cater for changes to the listing an updated list will be provided to clients as an addendum to your disclosure notice at each renewal.
  • All representatives will update their e-mail and letter signatures to include the following statement;

“I am an authorised representative (under supervision if that is the case) and meet all the required honesty, integrity and educational standards”

  • All other staff will update their e-mail and letter signatures to include the following statement;

“I am not authorised to provide any financial services but do meet the companies honesty and integrity standards”

 

If required we will develop a draft client SLA that caters for the suggested statements as well as the suggested annual representative disclosure document.

 

Underwriting managers (UMA”s)

A different approach here as the UMA does not deliver a financial service to the client (policyholder) but rather to the insurer they represent. But never the less given that the new regulations do not reflect this situation we still believe the structures should address the matter in the most practical way possible.

 

  • A statement will be added to the disclosure notice as follows;

“We undertake to ensure that all staff delivering a financial service to or on behalf of the insurer we represent are all authorised representatives and who meet all the required honesty, integrity and educational standards and that we check these at least on an annual basis”

  • All representatives will update their e-mail and letter signatures to include the following statement;

“I am an authorised representative (under supervision if that is the case) and meet all the required honesty, integrity and educational standards”

  • All other staff will update their e-mail and letter signatures to include the following statement;

“I am not authorised to provide any financial services but do meet the companies honesty and integrity standards”

 

Insurers

We will be dealing with our clients that fall into this category by way of a specific interaction with them.

Our new monitoring tools, to be introduced from June 2014, will be upgraded to enable us to record the standards you choose to adopt as well as on-going adherence to those standards.