Openwork puts faith in advisers’ 'judgement'

The importance of an adviser’s judgement in making client recommendations has been pushed to the top of the agenda at Openwork as the multi-tied adviser seeks to move away from its previous “box-ticking” culture.

Chief executive Martin Davis says the move will mean less bureaucracy but he also warned it would involve a revamp of its business checking procedures and place more pressure on the company's 2,500 advisers to keep detailed records of their recommendations.

He adds it is part of a two-stage, three-year plan he hopes will "set the standard" in preparing advisers for the RDR and, in particular, its focus on customer outcomes.

The "old way" of giving advice, Davis says, referring to advisers following a set procedure, is no longer adequate. In his opinion, advice based purely on a set of guidelines does not merit automatic approval.

"As long as you met the rules, the general consensus was you were giving suitable advice," he says. "But if you follow a box-ticking approach, there are only so many scenarios you can go through.

"Our advisers will apply their judgement over and above that process. If a client says his attitude to risk is cautious, we say that should not be taken as gospel. If an adviser is on the hook for the advice he gives, it raises the bar. We think that is the way to go."

Davis was installed as chief executive in July following Keith Carby's exit and 25% shareholder Zurich's bid to push the network toward an independent offering.

He says the company, which previously marketed itself as a "sales-focused" business, will change the way it checks the recommendations of its advisers.

"As we move toward RDR we are taking a more segmented approach to not only what [type of business] we check, but also the volume we check," he says.

"The key is to check the right amount. There is no point checking 30% of all pure protection term policies if 100% are coming through clean. A complex pension switch, however, we would expect to check a higher percentage."