Efficient and defensible audits depend on well‑structured, clear and easily navigable documentation. One of the most significant sources of wasted time for auditors is the task of locating accurate, finalised and relevant documents within a licensee’s system. When files are poorly organised or naming conventions are inconsistent, the process of verification becomes unnecessarily slow and prone to error. This problem is particularly evident in systems such as Xplan, where documents are sometimes labelled as “(signed)” only for auditors to discover that no signature is present. These situations not only disrupt the audit workflow but also raise broader concerns about the licensee’s documentation governance and reliability.
Why File Naming and Organisation Matter
Auditors rely heavily on accurate file names and structured storage to quickly assess whether a client file contains all necessary records, such as authorities, signed disclosures, advice documents and evidence of consent. When naming conventions are unclear or inconsistent, auditors must spend time opening multiple documents to determine their relevance or completeness. This issue is magnified when numerous versions of a document exist, some signed, others unsigned, and others stored in incorrect or outdated folders.
Such inefficiencies are rarely isolated. Poor file hygiene often reflects deeper weaknesses in the advice processes, such as incomplete records, unclear reasoning behind recommendations or an inability to provide prompt evidence in the event of a review or dispute. These weaknesses not only affect audit outcomes but can also point to broader compliance and governance risks.
Lessons from the AFCA Annual Review 2024–25
The AFCA Annual Review 2024–25 highlighted multiple systemic documentation issues across the industry, many of which directly mirror the challenges auditors encounter. AFCA reported frequent instances of inadequate documentation, including the use of templated documents that were insufficiently personalised to the client. In many disputes, AFCA identified that advice documents contained generic wording, missing information or placeholder text—clear indications that documents were not tailored to reflect the client’s circumstances.
AFCA also raised concerns about unsigned documents, absent evidence of client agreement and failures to maintain accurate records of informed consent. These gaps contributed significantly to adverse determinations, particularly in advice and insurance disputes. When faced with incomplete or unclear records, AFCA consistently found it difficult for licensees to demonstrate compliance with advice obligations or defend the suitability of their recommendations.
For auditors, these findings emphasise the importance of documentation quality and the need for sound file governance. Inadequate or misleading file naming practices, outdated templates and inconsistent record‑keeping create vulnerabilities that are likely to be exposed both in audits and during external dispute resolution.
ASIC Expectations for Quality Advice
ASIC’s expectations for financial advice, as outlined in Regulatory Guide 175 (RG 175), reinforce the importance of detailed, accurate and client‑specific documentation. ASIC expects advice files to clearly explain the basis of any recommendation, how the adviser satisfied the best interests duty and how the advice aligns with the client’s personal and financial circumstances. Evidence of informed consent, including correctly signed documents and clear acknowledgements, is essential.
A well‑structured and consistently organised file system directly supports these obligations. When files are easy to locate, clearly labelled and reflective of client‑specific content, advisers and licensees are better positioned to demonstrate regulatory compliance and withstand external scrutiny.
Good Practice Recommendations for Licensees
Licensees can significantly strengthen advisers’ audit readiness and overall compliance posture by developing disciplined documentation practices. Establishing a standard naming convention for all client documents helps ensure clarity and consistency. Naming conventions should incorporate the client’s name, the document type, the date and the document status. Importantly, descriptors such as “signed” should be used only after the document has been verified as executed.
Clear, consistent folder structures in Xplan and other repositories further reduce confusion and streamline document retrieval. Each client file should follow the same logical layout, making it simple for auditors and internal staff to locate advice documents, review records and evidence of consent.
Removing outdated document versions and applying version control practices reduces the likelihood of incorrect or superseded files being relied upon. Templates should always be fully personalised, ensuring that each document reflects the client’s unique objectives, financial position and needs. Routine file hygiene reviews can also help identify issues early, allowing teams to correct documentation gaps before they become audit findings.
Final Thoughts
Clear, well‑organised and accurately labelled documentation is no longer a matter of administrative preference—it is a regulatory expectation and a cornerstone of audit efficiency. The AFCA Annual Review 2024–25 and ASIC’s guidance both highlight that poor documentation and generic, non‑client‑specific records contribute directly to negative audit and dispute outcomes. By implementing disciplined naming conventions, strong organisational structures and robust documentation standards, licensees can reduce audit inefficiencies, strengthen compliance outcomes and enhance the defensibility of their advice.
If you would like support developing standard naming conventions or establishing a firm‑wide documentation protocol, AICS can assist with templates, checklists and best‑practice workflows.
References
ASIC Regulatory Guide 175 – Licensing: Financial Product Advisers – Conduct and Disclosure
