AdvicePay adds compliance tool to financial plan

AdvicePay sees “lots of businesses that weren’t using AdvicePay for payments, but are now talking to AdvicePay about deliverables, as they may not be billing plans separately…but head office needs to review financial plans at quality control purposes and just to make sure they are done correctly,” he said.

Regulatory monitoring

Explaining why AdvicePay saw a need for deliverables, Kitces noted that regulators have focused over the past decade on ensuring customers get value for the fees advisors charge them, particularly in this regarding the subscription and retention fee models.

Firms are expected to document their financial advisory activities and validate that a financial plan was indeed delivered to the client in return for the fees charged, he said. Regulators want to make sure advisers don’t engage in “reverse churning,” Kitces noted, referring to the practice of collecting fees from clients but not really doing anything for the money.

Now that fee-for-service financial planning is on the rise, it’s no surprise that regulators are looking at what clients receive for the upfront or ongoing financial planning fees they pay, he said.

AdvicePay anticipated this reaction, so it began working to publish the deliverables as a “best practice approach to help large businesses manage this review process, extending” the payment processing technology of the company to “provide a systematic and automated system for companies to increase their fee-for-service financial planning in a compliant manner,” Kitces said in the announcement.

Currently, most large consulting firms have not been able to systematize and automate the record keeping requirement and instead have to resort to complex and error prone spreadsheets with manual updates, according to AdvicePay.

By providing key validation to regulators that a financial plan has been provided by an advisor for the fees that have been charged, Deliverables helps companies avoid regulatory fines and negative headlines for “no service” claims, according to AdvicePay.

“From the start, we designed AdvicePay to be much more than just a payment processing platform,” said Alan Moore, who co-founded AdvicePay with Kitces, in the announcement. “The wealth management industry is constantly evolving, with ever-changing business and regulatory requirements, so our nimble, nimble and flexible technology base is once again proving its strategic importance with the release of deliverables.”

AdvicePay will continue to work with business customers to “further adapt and customize the platform so they can continue to grow, compete and succeed in an increasingly complex and competitive industry,” he said. added.