FOFA Disclosure: Data preparation updateUsing Xplan Entity ID to improve data matching process between DMS & Xplan

Contents

• Introduction: FOFA disclosure - Data preparation update

• Matching process between DMS Online & Xplan

• Xplan Entity ID – supporting an improved match

• How to enter Xplan Entity ID in DMS Online

• Summary – data preparation steps for your practice

• Appendix: FOFA readiness – practice preparation (as previously communicated)

2

Introduction: FOFA Disclosure – Data preparation update

• To help you meet your FOFA disclosure obligations RI will be introducing an automated solution to assist you with the production of a Fee Disclosure Statement (FDS) for clients

– More information on this end-to-end solution will be provided at RI’s FOFA workshops, commencing in May

• The automated solution involves a new system called CommPay, which will work behind the scenes and create a bridge between your existing systems ie DMS Online & Xplan so that your client fee information can flow into Xplan

• In order for fee information to flow into Xplan automatically a data matching process has to occur

• This data matching process is done initially on a “client name” basis, which won’t always guarantee a clear match

• Another key piece of information can be entered into DMS Online to improve the accuracy of data matching, which in turn will help streamline the process for you to generate an FDs from 1 July 2013

• Refer to the following slides for more information

3

Matching process between DMS and Xplan

• DMS Online and Xplan will initially match client records on a client name basis

• As such, the client groupings you’ve established in DMS Online will assist with this matching process, however, they won’t guarantee a 100% matching rate

• Matching client records based on client names has some inherent issues:– Different naming conventions in DMS compared to Xplan clients No match

– e.g. DMS client group “Smith Family” won’t match with the Xplan client “John Smith”– Multiple DMS records with the same name Multiple matches No match

– e.g. where two clients have the same name e.g. “John Smith,” Xplan won’t create a match as it can’t differentiate the two clients purely on name

• In the above situations the data will not automatically match and you will be required to manually match the DMS client records to the correct Xplan client (more information on how to do this will be provided at FOFA training sessions)

• A solution to improve the automatic matching rates and reduce the amount of manual data matching work required is to match DMS Online client records to Xplan clients using the Xplan Entity ID

Xplan Entity ID – supporting an improved match

• Attaching the Xplan Entity ID to a DMS client group will increase the probability of a match, and improve the accuracy of the matching process

• The following slides provide a detailed explanation of how to:1. Identify the client’s Xplan Entity ID2. Allocate the Xplan Entity ID to a DMS group to support the match between DMS and Xplan

• We encourage you to start entering the Client Xplan IDs as this will assist with a better flow of data in the long run

• Please note, however, that this task is not a mandatory requirement to ensure client matching

• In many cases the client data will match based purely on the client’s name. Entering the Xplan Entity ID simply provides another identifier to assist with the matching process.

How to enter Xplan Entity ID in DMS Online

STEP ONE – identify the client’s Xplan Entity ID In Xplan, the client ID is located in the client screen next to the client name as indicated below. It is generally a 6 digit number however it can be 5 or even 7 numbers long.

6

STEP TWO – Log into DMS Online and navigate to the ‘Advisor Client Management’ menu as indicated below.

How to enter Xplan Entity ID in DMS Online

7

STEP THREE – Select the client in DMS Online that you would like to update and click on ‘Add Client Group’ for new clients or ‘Edit Client Group’ for existing clients. The ‘Add/Edit Client Group’ popup box will appear.

How to enter Xplan Entity ID in DMS Online

8

STEP THREE – Continued

How to enter Xplan Entity ID in DMS Online

9

STEP FOUR – Enter the Xplan ID into the Reference/Xplan Entity ID field and save the client group.

Once saved, the Xplan client ID is now recorded against that client group in DMS Online.

How to enter Xplan Entity ID in DMS Online

10

Summary – data preparation steps for your practice

• In addition to grouping your clients in DMS Online, entering the Xplan Entity ID into DMS Online will improve the level of automatic data matching between DMS & Xplan

– Note, however, that while this task is recommended, it is not a mandatory requirement as a level of matching will occur on a client name basis regardless

• Please also continue with the other steps previously communicated to prepare for your FOFA disclosure obligations:

– Identify which clients will need an FDS, prioritising July, August & September FDS clients

– Ensure an Anniversary Date is in place for all clients needing an FDS in July, August & Sept

– Ensure naming conventions for client grouping are consistent, where possible, between DMS Online & Xplan. The recommended naming convention is “SURNAME, FIRSTNAME”

• Refer to Appendix 1 for previous communication regarding practice preparations steps

• If you need any support with these tasks, please speak to your Practice Development Coach or RPM

11

Appendix - FOFA readiness – practice preparationAs communicated in RI Report in March 2013

FOFA readiness – practice preparation (communicated March 2013)

Annual Disclosure & Opt-In

Action Responsibility Support

• Group clients in DMS Practice •DMS User Guide•Talk to your Prac Dev Coach

• Ensure processes in place to maintain client groupings Practice Talk to your Prac Dev Coach

• Ensure client segmentation in place so clients paying an ongoing ASF can be clearly identified

Practice •Refer to Best Practice > Fee for Service > Client Service Agreement Tools on Adviser Services •Talk to your Practice Development Coach or PDM

• Ensure ongoing service model in place for practice and all clients paying an ongoing ASF have a client service agreement

Practice •Refer to Best Practice > Fee for Service > Client Service Agreement Tools on Adviser Services •Talk to your Practice Development Coach or PDM

• Ensure clear client review process in place – use Manage Review process in Xplan

Practice •Talk to your Practice Development Coach or PDM

• C&D clients (non-active paying ASF) – tidy up this segment between now and July 2013

Practice •Talk to your Practice Development Coach or PDM

• Ensure clear ‘anniversary date’ in place for every client paying an ongoing ASF. Anniversary date is last client review date between 1 July 2012 and 30 June 2013

Practice •Talk to your Practice Development Coach or PDM

• Opt-in: No specific additional requirements until 2015 other than ensuring ‘anniversary date’ in place for clients paying an ongoing ASF

Practice •Talk to your Practice Development Coach or PDM

Aim to complete these tasks by end March / early April if possible

13

FOFA readiness – practice preparation (communicated in March 2013)

Best Interest

Action Responsibility Support

• Be aware of your obligations & the Best Interest ‘safe-harbour’ steps

Practice •Talk to your Prac Dev Coach or PDM•Refer Appendices

•Self-check to ensure your current documentation (eg file notes, fact finds, SOAs etc) clearly show you put the client’s best interests first ie you need to have documented ‘evidence’

Practice/Adviser •Talk to your Prac Dev Coach or PDM

• Ensure you’re using all the advice docs and tools available to RI Advisers to help document the advice process, thinking and rationale behind a strategy for a client

Practice •Talk to your Prac Dev Coach or PDM•Refer to Adviser Services website > Advice & Best Practice sections

• Check if there are other tools available which you could use to help with documenting the process eg CALS, Chant West

Practice •Talk to your Prac Dev Coach or PDM•Refer to Adviser Services website > Advice & Best Practice sections

Aim to complete these tasks by end May if possible

14

FOFA readiness – practice preparation (communicated in March 2013)

Conflicted Remuneration

Action Responsibility Support

• Review fee for service model to ensure you’re comfortable that you’ll have continued revenue streams once commissions for investments and super are banned

• If not, consider:• Developing your CVP & CSP• Carry out COS and segmentation• Implement transition plan

Practice/ Adviser Talk to your PDM

• Review group risk arrangements & cover under default super (in light of commissions being banned) and explore alternative fee model ie•Group policies can administer ASFs which need to be agreed with client•Look at individual members needs vs. current policy – Is a retail solution in the client’s best interest?*

Practice/Adviser Talk to you PDM

•Ensure all staff are aware that advisers must not charge an asset-based fee on a borrowed amount used to acquire financial products

Practice/ Proprietor Talk to your PDM

•Brief staff on the change of limits to soft-dollar benefits, ie:•$100-$300 record on practice register •$300+ banned

Practice/Proprietors Talk to your PDM

•Review remuneration structure of any employed advisers within the practice to ensure nothing conflicted (ie no incentives based on volume)

• Reconsider KPIs if required eg move to fixed dollar FFS rev, client appts held, profitability etc*

Practice/Proprietors Talk to your PDM

Aim to complete these tasks by end May if possible

15*Note: legislation is yet to be finalised – this may change to 2014. Further details to be provided when available