The arrival of Fixed Term Service Agreements (FTSAs) signalled one of the biggest changes to the management of ongoing relationships by advice practices. In essence, FTSAs are a very simple and sound way to protect clients from being charged without the provision of a service.
From a practice point of view, not much has changed, except that practices now have a very large responsibility to reconcile what is done for the client and ensure that the client file reflects this – with the timing being important as well.
Given that the agreement is now for a set period, practices need to make sure that the end of old agreements perfectly match up with the start of new ones so that the client is never out of an agreement. If this does happen, practices run the risk of not servicing clients when they need it. This can mean that fees get switched off and a potential refund will come into play if you have not met the deliverables set out in your FTSA.
While a File Note would have sufficed previously, an RoA is now the minimum standard that needs to be met to demonstrate that you have met your responsibilities to the client. This is a function within your business that needs to be well set. But do you have a robust process in place? Do you know why it is structured the way it is? And do you know how much time is being spent on this?
As there is more to deliver to substantiate the file (the compliance required to charge the fees to the client), a practice’s cost to serve will usually take a beating as more hours will be spent doing these tasks. This will directly impact the profitability of the advice business.
This is where we can help – we have built a tested and well-functioning solution to this challenge. Our team has selected core pieces of the FTSA puzzle that ensures that advisers can spend more time taking care of their clients, rather than having to worry about the process.
If this is something you are interested in, reach out to me (firstname.lastname@example.org) or schedule an appointment (https://www.planlogic.com.au/schedule-a-meeting/) and let’s look at how we can support your business.