Management Information - Hints and Tips

8/6/2019 Management Information - Hints and Tips

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ManagementInformation

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.

2011

Lee Werrell

CEI Compliance Limited


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Introduction to Management InformationBy CEI Compliance Limited

Page | 2 Version 1.0 Sept 2010www.ceicompliance.co.uk Your Compliance Partner

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 and what you

will do with it when you know.

Recorded: Write down in hard or soft copy what you do when you gather

the information, why it is important and actions you will take at various

thresholds or breaches. Circulate the results to those who need to know andincorporate 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? Do 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.

Did You Know? Between

April and September

2010, the FSA fined 5

companies over 850,000

in cases involving

inaccurate, misleading or

non-existent MI. Dont

get caught out.
http://www.cei-compliance-limited.co.uk/bsc/http://www.cei-compliance-limited.co.uk/bsc/


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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 considerrelevant. 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 the resources and adequate

support to fulfil their role to the standards set by the company? Risk Management: Can you demonstrate that you have assessed and

prioritised all risks and can 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 areno issues with advisers acting inappropriately?

Competence and Qualification: Can you

identify the gaps in advisers 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 the 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 are aware of their responsibilities? Identify average

time of complaints investigations and resolution?

CEI Compliance can assist you in

preparing all of your compliance

monitoring, risk register and

remedial work planning.

Call them today on 0800 689 9 689

or go online at

www.ceicompliance.co.uk
http://c/Users/Lee%20Work/Documents/Consultancy/CEI%20Consultancy/Back%20Office/Marketing/White%20Papers/www.ceicompliance.co.ukhttp://c/Users/Lee%20Work/Documents/Consultancy/CEI%20Consultancy/Back%20Office/Marketing/White%20Papers/www.ceicompliance.co.uk


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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

T&CThe T & C scheme included completing

an initial risk assessment for each adviser

by grading each of them. This would

take into account industry experience,qualifications, complaints, types of

business they would be writing, Key

Performance Indicators (KPIs) and the

results of file reviews. The three grades

determined how much supervision each

adviser needed.

Financial PromotionsThe firm had a procedure in place thatrecorded customer queries and

complaints received about their

financial promotions. The results were

measured and analysed enabling the

firm to identify areas of concern and act

upon them.

Poor Practice

The principal at the firm considered

that because he trained and trusted

an adviser, he didnt need to formally

review his work. There was some formof training programme in place for a

less experienced adviser. However,

the lack of suitable monitoring and

review procedures meant there was a

real risk that customers could receive

poorer quality of advice and the firm

was exposed to the risk of future

complaints.

The firms website was not included in

its Financial Promotions checklist.

Therefore, the firm did not remove out-

of-date and inappropriate material

from its website.

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 advisers remuneration?


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If you do not assess and measure your firms recruitment procedures to ensure they aresufficiently 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 ofbusiness they will bring to your firm, you can assess if this is appropriate for the adviceand services being provided to your customers and you can assess your firms 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 financialpromotions, 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.

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 firms

long term benefit. Call 0800 689 9 689 today or goonline 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 guide
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