Death to the Factfind!

A few years ago, I went on a 2 day compliance supervisors training course in Leeds. You may have heard my screams as the train went past your town, dragging me inexorably towards my fate.

A number of things happened on that course which showed the enormous disconnect between what compliance wants, and what we actually do.

Now, I’m not bashing compliance here. I am actually a great fan of compliance, in principle. Those advisers who used to refer to the compliance officer as the ‘Business Prevention Officer’ have hopefully either been forced to change by RDR or given up the fight and moved on.

It’s the way compliance works that bugs me. For years, the FSA have been trying to force IFAs to be more accountable for their time, to look at client needs, to become fee based planners. And yet they regulate based around the sale of a product. When I submit my Gabriel return, I feel like phoning up the FSA in tears, crying down the phone “You just don’t understand me…”

Back to the supervisor’s course. We were shown a video of the ‘perfect’ first client meeting. The fact-finding meeting. The meeting where you get to know your customer. This, they said, is the way that we would like all advisers to conduct the first meeting.

I stared at the screen, horrified, as I watched an adviser (white shirt, tie, probably white socks too) sitting across a desk from a new client. He had a 19 page factfind on the desk in front of him, each page full of boxes to be filled in. He proceeded to go through each question, looking down as he wrote the client’s answer, looking up briefly, then looking down again as he read the next question.

I don’t need to tell readers of the Adviser Lounge what is wrong with this. At Ovation, we don’t allow a factfind into a meeting. The adviser asks a question, then shuts up. He listens. He (or she, except we don’t have any female advisers. We’d love to, but there aren’t enough around) should be focussed on the client, judging their body language, assessing mood to understand their priorities and beliefs, getting an understand of what money means to them.  They should be guiding the meeting, slowing down at sensitive moments, making sure it moves towards resolution, action points, so that the client will leave the meeting feeling that something has changed for the better. Facts are needed, of course, but they come out through conversation, with the blanks being filled in later, by email or telephone call.

Even better is to have a paraplanner in the meeting as well. Then the adviser can focus totally on the client, with someone else making the meeting notes and gathering the required information.

As I recall, after the video presentation, I offered my opinion about their version of  the ‘perfect’ meeting. The course leader shook his head at me sadly (I’ve had that a lot through my life…), and gave a response along the lines of ‘You might not like it, but that’s what you have to do’.

Facts are needed, of course they are, but they don’t need to be gathered in that first meeting. Let’s get rid of the factfind, and make sure our concentration is on the client and their needs and desires.

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24 thoughts on “Death to the Factfind!

  • Absolutely agree with your comments Chris. I think that the time spent during the first meeting should be spent really understanding the client. Whilst gathering and analysis of the facts are really important I believe there is no need to do this during a face to face meeting.

    Within our practice we take a different approach….new clients completes the fact find (we call it a client questionnaire as the phrase fact find means nothing to our clients) prior to the first meeting.

    We explain to our clients that the reason we ask them to do this is so that we can spend meaningful time talking about what they are truly looking to achieve.

    Whilst initially we wasn’t sure how new clients were going to react to this approach we found that by spending some time prior to our meeting they attend more engaged, more prepared and with a greater understanding of where they sit financially

    I don’t think there’s a wrong or right answer to the route to take on this….but I agree that the time with our clients should be spent as meaningfully as possible!

    Reply
    • Good idea, Chris, we may well give that a try! Just what the Adviser Lounge is intended for, sharing good ideas

      Reply
    • We was only discussing doing the very same the other day. Time to act, and see how it goes.

      Fact Finds : we call them Financial Planning Questionnaires.

      Reply
  • Good article Chris B.

    As a once active IFA I practiced Chris D’s approach for many years on the basis that firstly, no-one wanted to pay me to fill in a form and secondly with reference to my initial ‘counsellor sales’ training, in the dim and distant past, that covered a fundamental point. What was that? Simply that people will buy what they want, not what they need and if all you have are facts, you can only sell to need. By definition therefore you cannot understand desires nor can you advise on an appropriate way of achieving them.

    In a similar way, ATR is often better established as a result of dialogue rather than through relying on a profiler – well, in my humble opinion, at least. People often don’t understand what risk they are being asked to take on, until it is explained to them – and then, in my experience, their attitude can often change.

    Ultimately, is about talk and LISTEN (I wish I could make that word even larger to illustrate the proportions!)

    Reply
    • With you totally, Frank! I’m constantly being told we have to use a risk profiler, but they are never accurate to what I hear with my own ears.

      Maybe that’s for another blog…

      Reply
    • Thanks Frank,

      We take the same approach with the attitude to risk. We use a profiling tool but merely as a starting point to a more meaningful conversation about risk.

      I absolutely agree with the point about listening….two ears one mouth and all that!!

      Reply
  • I saw my IFA recently and I have no recollection of him completing a fact find it was just a nice easy flowing conversation. It’s an over used phrase but “one mouth two ears – use them in that proportion” comes to mind.

    Great piece, enjoyed reading it.

    Reply
  • Chris

    As a compliance man you may be suprised to learn I completely agree with you.

    A long fact find document draws your attention away from the client and disrupts your meeting.

    Hard facts should be gathered by letters of authority in the main leaving the meeting to concentrate on the client.

    A good quality meeting note and a bunch of LOAs is more than sufficient. This info can then be loaded onto your back office system afterwards and used to produce a fact find if you wish.

    Reply
  • Quite right our first meetings are for “Getting to know you” and a draft Factfind can be built afterwards not during – when listening is required, this is how the first elements of Trust are built.

    As and when data is needed this can be collected from providers and/or the client. Our clients never see one.

    Reply
  • Agree wholeheartedly with your article and the comments so far.

    One additional thing we have experimented with is recording the discovery meeting and having it transcribed. It’s amazing how much you miss when you listen again.

    Reply
  • I agree wholeheartedly with this to the extent that like Chris Bowmer I never take a fact find/financial planning questionnaire into my meetings. My paraplanners acquire the information we need through letters of authority or having the clients complete the questionnaires before coming to the meeting (or both).

    I go to meetings with a pad of plain paper to draw on, write on, or mind-map on – and I have an agenda to make sure I stay on track because the meetings can wander in many directions. As they should. Other questionnaires such as Maria Nemeth’s ‘Life’s Intentions’ and/or George Kinder’s ‘three questions’ are also sent to clients to do at home. They may act as a further prompt for questions.

    I’m also with Frank on the subject of Risk. We use Finametrica, but only as a basis of discussion, and to assist with understanding attitude versus capacity, and the inevitable education that is needed.

    Provided there is sufficient evidence on file to demonstrate that you ‘know your client’ I don’t believe that the regulator really expects anyone to take client’s through a scripted fact finding first meeting.

    Good discussion point Chris. And good to see people in general agreement.

    Reply
    • Thanks, Dennis, it seems there is general agreement about this. Wonder how long we’ve all been keeping quiet about it!

      To be fair to the FSA, they don’t demand a questionnaire, they just require that we can prove we ‘know our customer’. I suspected it was the corporate compliance officers from many years ago who decided a questionnaire was the answer.

      Reply
  • I saw my IFA recently and I have no recollection of him completing a fact find it was just a nice easy flowing conversation. It’s an over used phrase but “one mouth two ears – use them in that proportion” comes to mind.

    Great piece, enjoyed reading it.

    Reply
  • Absolutely agree with your comments Chris. I think that the time spent during the first meeting should be spent really understanding the client. Whilst gathering and analysis of the facts are really important I believe there is no need to do this during a face to face meeting.

    Within our practice we take a different approach….new clients completes the fact find (we call it a client questionnaire as the phrase fact find means nothing to our clients) prior to the first meeting.

    We explain to our clients that the reason we ask them to do this is so that we can spend meaningful time talking about what they are truly looking to achieve.

    Whilst initially we wasn’t sure how new clients were going to react to this approach we found that by spending some time prior to our meeting they attend more engaged, more prepared and with a greater understanding of where they sit financially

    I don’t think there’s a wrong or right answer to the route to take on this….but I agree that the time with our clients should be spent as meaningfully as possible!

    Reply
    • We was only discussing doing the very same the other day. Time to act, and see how it goes.

      Fact Finds : we call them Financial Planning Questionnaires.

      Reply
    • Good idea, Chris, we may well give that a try! Just what the Adviser Lounge is intended for, sharing good ideas

      Reply
  • Good article Chris B.

    As a once active IFA I practiced Chris D’s approach for many years on the basis that firstly, no-one wanted to pay me to fill in a form and secondly with reference to my initial ‘counsellor sales’ training, in the dim and distant past, that covered a fundamental point. What was that? Simply that people will buy what they want, not what they need and if all you have are facts, you can only sell to need. By definition therefore you cannot understand desires nor can you advise on an appropriate way of achieving them.

    In a similar way, ATR is often better established as a result of dialogue rather than through relying on a profiler – well, in my humble opinion, at least. People often don’t understand what risk they are being asked to take on, until it is explained to them – and then, in my experience, their attitude can often change.

    Ultimately, is about talk and LISTEN (I wish I could make that word even larger to illustrate the proportions!)

    Reply
    • Thanks Frank,

      We take the same approach with the attitude to risk. We use a profiling tool but merely as a starting point to a more meaningful conversation about risk.

      I absolutely agree with the point about listening….two ears one mouth and all that!!

      Reply
    • With you totally, Frank! I’m constantly being told we have to use a risk profiler, but they are never accurate to what I hear with my own ears.

      Maybe that’s for another blog…

      Reply
  • Agree wholeheartedly with your article and the comments so far.

    One additional thing we have experimented with is recording the discovery meeting and having it transcribed. It’s amazing how much you miss when you listen again.

    Reply
  • Chris

    As a compliance man you may be suprised to learn I completely agree with you.

    A long fact find document draws your attention away from the client and disrupts your meeting.

    Hard facts should be gathered by letters of authority in the main leaving the meeting to concentrate on the client.

    A good quality meeting note and a bunch of LOAs is more than sufficient. This info can then be loaded onto your back office system afterwards and used to produce a fact find if you wish.

    Reply
  • Quite right our first meetings are for “Getting to know you” and a draft Factfind can be built afterwards not during – when listening is required, this is how the first elements of Trust are built.

    As and when data is needed this can be collected from providers and/or the client. Our clients never see one.

    Reply
  • I agree wholeheartedly with this to the extent that like Chris Bowmer I never take a fact find/financial planning questionnaire into my meetings. My paraplanners acquire the information we need through letters of authority or having the clients complete the questionnaires before coming to the meeting (or both).

    I go to meetings with a pad of plain paper to draw on, write on, or mind-map on – and I have an agenda to make sure I stay on track because the meetings can wander in many directions. As they should. Other questionnaires such as Maria Nemeth’s ‘Life’s Intentions’ and/or George Kinder’s ‘three questions’ are also sent to clients to do at home. They may act as a further prompt for questions.

    I’m also with Frank on the subject of Risk. We use Finametrica, but only as a basis of discussion, and to assist with understanding attitude versus capacity, and the inevitable education that is needed.

    Provided there is sufficient evidence on file to demonstrate that you ‘know your client’ I don’t believe that the regulator really expects anyone to take client’s through a scripted fact finding first meeting.

    Good discussion point Chris. And good to see people in general agreement.

    Reply
    • Thanks, Dennis, it seems there is general agreement about this. Wonder how long we’ve all been keeping quiet about it!

      To be fair to the FSA, they don’t demand a questionnaire, they just require that we can prove we ‘know our customer’. I suspected it was the corporate compliance officers from many years ago who decided a questionnaire was the answer.

      Reply

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