Enablement... on the whole, a Good Thing
Since 2009, ValidPath has had a fully-compliant advice framework baked into its practice-management technology. At the end of 2019, we upgraded our systems from the old provision, which simply was not keeping up with the times, and opted for one which supplies many more options to both our Members, and ourselves as the authorising Network. It is, admittedly, rather more complex than the system it replaced (and there are good reasons for that), but the underlying fundamental principles remain the same: every single new piece of advice, each new transaction is to be fully-compliant, as defined by the nature of the framework provided.
Every new system comes to a very large extent unconfigured, and so ValidPath carried out a significant amount of preparatory work for the new one, in readiness for implementation in December 2019 - and we've been working more or less flat-out on it ever since. As you might expect, there have been all the usual frustrations but, by dint of dogged determination, we are getting there. We do fully appreciate that this has been a steep learning-curve for all of us, and are grateful to a majority of our Members for their cooperation in getting up to speed.
Amongst other critical functions, good systems are there to allow the authorised firm (ValidPath) to effectively discharge its role, when it comes to supervision. We know from experience that when we are unable to view the extent of a client file's compliance in real time, then problems are likely to emerge from the woodwork at some point. Within the Network/AR relationship, all of this is 'doable' - providing that Members use the system, as we have advised. So, being able to operate systems which enable that kind of supervision, is a good thing. In fact, it's not just good, it's essential.
Out there, in the Wild West of Direct Authorisation (or Dystopian Activity), things are very different. For those DA firms which choose not to buy in additional services, there is actually very little that resembles the kind of supervision that ValidPathers take for granted. The FCA's Gabriel system takes retrospective snapshots of particular kinds of data which are supposed to generate some kind of alert, but which in practice bear little relationship to the granular nature of specific kinds of advice being delivered, and the particular risks associated with them. Whatever it is that the FCA does, this cannot constitute 'supervision' in any kind of meaningful way, or at least in a way that helps protect intermediary firms in the current climate of redress opportunism.
For those DA firms which are prepared to embrace the additional cost, then there are service-providers out there who supply 'a kind' of solution. The nature of the resulting supervision will depend on the extent of the support-service's intrusion into the everyday activities of advisory firms, and that will be a direct function of culture. Formulaic? Box-ticking? The replacement of your own style of advice with a kind of robotised bureaucratese? The introduction of multiple hurdles prior to completing new business? Or, at the other end of the spectrum, a kind of laissez-faire supply of generic templates, leaving you right at Square One when it comes to personalisation, customisation and delivery. When it comes to the best outcomes (for both client and adviser), those support services have precisely zero skin in the game and that shortcoming is generally glaringly obvious to users.
That's not how we do things at ValidPath. There's a compliance framework which auto-creates for each case an Adviser handles, and that framework is the reminder of everything you need in order to create a valid file, as well as (to some extent) setting the expectations for the quality of the thing. We're not really all that interested in box-ticking for its own sake - ValidPath's focus has always been on the quality of outcomes. Those frameworks are there for a reason - and when our Members use them, as supplied, what they are doing is effectively insuring their own work against the huge risks associated with ad-hocism. When you do this, our supervisory team can run their checks, unobtrusively in the background and generate any alerts that may be needed. If you've missed something important, it's likely that we can catch it in time, provided that you are using the system as intended.
There will always be room for improvement, and ValidPath has been steadily expanding its resources to aid that objective. Right now, we have a finely-tuned solution which allows our Members to get on with their work without continually being stopped by draconian supervisory intrusions. In a world dominated by regulation, this is the nearest that any of us will ever get to full enablement.