Management information v1 6
 

Management information v1 6

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CEI Compliance is the UK's fastest growing regulatory consultancy and provides associate opportunities to consultants and cost effective value to financial services and other regulated companies.

CEI Compliance is the UK's fastest growing regulatory consultancy and provides associate opportunities to consultants and cost effective value to financial services and other regulated companies.

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Management information v1 6 Management information v1 6 Document Transcript

  • 2012 Management Information …and its use within an IFA scenario Management Information (MI): Application of management techniques to collect information, communicate it within and outside the organization, and process it to enable managers to make quicker and better decisions. Management Information System (MIS) is a system or process that provides information needed to manage organizations effectively. Management information systems are regarded to be a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures. Management information systems are distinct from regular information systems in that they are used to analyse other information systems applied in operational activities in the organisation.Page | 0 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor Lee Werrell CEI Compliance Limited
  • Introduction to Management Information By CEI Compliance LimitedContentsBackground ...................................................................................................................................................................Fundamentals ...............................................................................................................................................................Assessing Your Needs..................................................................................................................................................Go Mobile- Request Other Whitepapers sent to your email; Compliance Risk Balanced Scorecard for Regulatory Visit Assessment Financial Crime 2012 SMEs Preparation Coaching Methodology S166 Guide for Snr Strategy Setting TCF Guide UCIS Sales Management Simply scan the QR code for the relevant WhitepaperPage | 1 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor
  • Introduction to Management Information By CEI Compliance Limited Now Available as Kindle or EBook Download Is your Compliance Department as compliant as it should be? Are your Compliance Risk Assessments accurate? Is your Annual Monitoring Plan as comprehensive as it should be? Click on the pictureAlso AvailableWe cover 11 main areas other than competence andqualifications to help you decide your strategy andassist with your planning to get you ready for 1stJanuary 2013.Our workbook covers;Business Vision and Mission StatementBusiness PlanOperational PlanFinancial CrimeRemunerationInvestment ProcessCreating a PortfolioGrowingCompliance (including our compliance riskassessment methodology)GovernanceExit Strategy – End Game PlanningClick Here to get full details and your copy NOW!Page | 2 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor
  • Introduction to Management Information By CEI Compliance LimitedBackground Since March 2008, when TCF measures required Management Information to provide a measure of how effective and the level of adherence of the application of the initiative, it seems that the FSA have increasingly encouraged businesses to use MI to demonstrate how they are operating and identify areas that may require some attention. A recent survey of companies across the FSA spectrum has provided evidence that a number of firms use MI but few can explain what they use it for or why? Often these elements are forgotten over time and seldom reviewed to reflect contemporary needs or risk factors. Designing MI to suit a company’s needs is not always easy, as it takes some time in planning to identify exactly what is needed. While we can, and have helped a number of organisations of all sizes constructing MI, the bottom line is, as always, what is to be done with the data. So why use MI or develop our own system for MI? Surely we know what is going on in our own business, don’t we? Obviously we do, anecdotally and superficially that is clear, but how do we compare results to groups of people, processes or risks identified and, furthermore, identify trends and improving or deteriorating results over time? Even as that great fictional investigator of Agatha Christie fame, Hercule Poirot would remark, sometimes the little grey cells let us all down. So if we are going to use any MI system, we have to understand and be absolutely clear on the form it is to take. There is no point in running multiple systems that offer a plethora of methods when all we will end up doing is getting confused: often challenging understanding about the definitions rather than the information. Who does this apply to? Well, quite honestly everyone from sole trader to large concerns; no one is exempt. Whilst a few people are afraid of doing things wrong by not having “the right” information it could easily be argued that, any information for comparison could be seen as better than none in many instances. Management information systems are designed to be organic and changeable over time, to develop with your business model, help you expand your business and can benefit you in many ways by assisting you to make better, informed decisions.Page | 3 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor
  • Introduction to Management Information By CEI Compliance LimitedPage | 4 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor
  • Introduction to Management Information By CEI Compliance LimitedFundamentals The basic rules needed for designing or improving any management information that we need is, to make it;  Relevant: Consider what is specifically relevant to your firm and who needs to see it or be aware of it.  Accurate: There is no point in making decisions based on rough figures or perceptions of performance.  Timely: How often does this need to be measured? Weekly; Monthly: Quarterly? Who needs to see it and when? Does it need to be collated first?  Acted upon: What are the key triggers? We know all about KPIs but what levels are acceptable? Be clear on what you are looking for Did You Know? In 2011, and what you will do with it when the FSA fined 9 companies over you know. £2,870,000 in cases  Recorded: Write involving inaccurate, down in hard or soft copy what you misleading or non- do when you gather the existent MI. information, why it is important and Don’t get caught out. actions you will take at various thresholds or breaches. Circulate the results to those who need to know and incorporate any decisions in policy reviews. The next item on your agenda has to be to decide how the information is going to be collected and used. How is it;  Gathered or sighted. New business register, Continuous Professional Development (CPD), Key Performance Indicators (KPIs), Key Risk Indicators (KRIs), training logs, compliance consultants reports, audits, TCF customer surveys, Not taken up(NTU) or Not proceeded with(NPW) applications, trail commissions, fees, training courses applied for or attended etc.  Analysis. How is this information collated? All information for everyone (name and shame) or certain data for Senior Management? Are there to be graphs, tables, bar charts or coloured segments to show progress, advancement on certain issues? Decide how you wish to present the information.  Circulation. Who needs to know and what level do they need to know? An adviser may need to know % of target for themself and their team, but management may need to know lapse rate and case scores specifically.  Action. Hold regular 1:1 meeting with staff. Set trigger points and action plan frameworks to include remedial training or enhanced supervision.  Measurement. How are these elements to be measured and moved on? What trends are there; are tolerances being met? DoPage | 5 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor
  • Introduction to Management Information By CEI Compliance Limited you need to use a scorecard? (See article on implementing the balanced scorecard in small and medium sized firms at http://www.cei-compliance-limited.co.uk/bsc/). Do not leave these fundamental steps to fall into place, because without them any further planning is unstable.Assessing Your Needs You have now decided what you are going to obtain MI on, and what you are going to do with it when you have got it, so now what? Now you have to look at the business processes and decide what you consider relevant. To give you some ideas you could look at;  Financial Position: Can you present to Senior Management that the company is meeting the FSAs own funds test and meet all liabilities as they fall due?  Financial Rewards: Can you identify incentives or rewards that may encourage inappropriate behaviour amongst the management, staff or advisers?  Span of Control: Do all individuals have CEI Compliance can assist you in preparing all of your compliance the resources and adequate support to monitoring, risk register and fulfil their role to the standards set by remedial work planning. the company? Call them today on 0800 689 9 689  Risk Management: Can you or go online at demonstrate that you have assessed and prioritised all risks and can www.ceicompliance.co.uk evidence that risks are mitigated or accommodated accordingly as well as the culture displaying that TCF is fully embedded?  Recruitment: Can you evidence that all Fit and Proper checks have been completed on all advisers and that previous complaints, concerns or other issues have had a satisfactory explanation or that periodic credit and other checks have provided comfort that there are no issues with advisers acting inappropriately?  Competence and Qualification: Can you identify the gaps in adviser’s knowledge and experience and take appropriate action to ensure any skill gaps are remedied or provided for? Can you confirm all advisers are adequately supervised?  Turnover and retention: Can you confirm that the reasons for leaving are specifically individual and not endemic?  Advice Process: Can you confirm that advisers are giving suitable advice and that their cases are being monitored adequately? How are the advisers risk rated? Do we know what sources of business are used by each adviser?  Product/Provider Selection: Can you satisfy senior management that products are adequately recommended according to thePage | 6 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor
  • Introduction to Management Information By CEI Compliance Limited client risk rating and that an appropriate range of products are considered for recommendation?  Financial Promotions: Identify financial promotions campaigns and their link to profitability or additional business generation? Identify any root causes from complaints (either end of next working day or regulated, as applicable)?  Complaints: Identify root causes and/or areas of concern for advisers or teams? Confirm all staff CEI Compliance conducts Executive are aware of their responsibilities? Coaching for Regulatory Visits Identify average time of complaints Call today on 0800 689 9 689 or send a investigations and resolution? blank email to regvis2012@cei- compliance-limited.co.uk Current Practices How do you know if what you are doing is good or bad? Surely if it works for you, it is OK? It is your business after all. The FSA have conducted studies of good and bad practices and while we are not going to provide each area duplicated in this document, we have reproduced some for you to get an idea of the things that are not bad practices, but could be better. Good Practice Poor Practice T&C The T & C scheme included The principal at the firm completing an initial risk assessment considered that because he for each adviser by grading each of trained and trusted an them. This would take into account adviser, he didn’t need to industry experience, qualifications, formally review his work. complaints, types of business they There was some form of would be writing, Key Performance training programme in place Indicators (KPI’s) and the results of for a less experienced file reviews. The three grades adviser. However, the lack of determined how much supervision suitable monitoring and each adviser needed. review procedures meant there was a real risk that Financial Promotions customers could receive The firm had a procedure in place poorer quality of advice and that recorded customer queries and the firm was exposed to the complaints received about their risk of future complaints. financial promotions. The results were measured and analysed The firm’s website was not enabling the firm to identify areas of included in its ‘Financial concern and act upon them. Promotions’ checklist. Therefore, the firm did not remove out-of-date and inappropriate material from its website.Page | 7 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor
  • So to assess if your Management Information System is relevant, accurate, timely, acted upon and recorded, you will need to answer a number of questions. Here are some examples;  Can you adequately assess the financial soundness of the people you recruit?  Are new recruits adequately supervised?  Can you identify weak areas of the advice process for individuals or a team?  When was your Compliance Manual updated?  Has the sales process changed since it was last documented?  How well does your review service for clients work?  Where there have been changes in circumstances for clients, do you review the previous advice?  When were your processes last tested and checked?  How do you measure your complaints; purely by numbers?  Are you comfortable of the impact of your adviser’s remuneration? If you do not assess and measure your firm’s recruitment procedures to ensure they are sufficiently robust, you could make inappropriate appointments. Identifying and addressing the root causes of staff turnover is good business practice. It could mean lower recruitment costs. By identifying the level of competency of new advisers and understanding the type of business they will bring to your firm, you can assess if this is appropriate for the advice and services being provided to your customers and you can assess your firm’s ability to adequately supervise them. This will reduce the risk of your firm giving customers poor advice. Not assessing and measuring how your firm identifies gaps in adviser skills and knowledge or the quality of the training could lead to poor advice. Not measuring key indicators such as persistency rates, replacement business and complaints may hide issues which could develop into larger problems later. These failures could lead to costly remedial action or regulatory discipline in the future. So we have seen that assessing information gathered from key areas such as financial promotions, complaints, recruitment and training and competence, can help you measure the standards within your firm, identify risks, highlight where standards can be raised and helps to protect your business. These areas are high traffic areas and if you are involved in sales yourself, can be very demanding and detracting from your own business.Page | 8 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor
  • Introduction to Management Information By CEI Compliance Limited CEI Compliance can help provide a full compliance support service, reducing required management time, ensuring all areas are up to date and working for your firm’s long term benefit. Call 0800 689 9 689 today or go online at www.ceicompliance.co.uk This whitepaper was written by Lee Werrell FInstSMM MCSI Cert PFS, founder of CEI Compliance Limited. Lee is contactable at any time and welcomes enquiries from all businesses. Call 0800 689 9 689. free guidePage | 9 Version 1.6 June 2012www.ceicompliance.co.uk The Compliance Doctor