The FCA has now provided feedback on its ‘assessing suitability‘ exercise. Their main concerns relate to ineffective disclosure. Can’t argue with that. Points to note are:

  • Always use cash examples to illustrate percentage-based charges.
  • When quoting hourly rates, give an indication of the time each service will take and estimate the total cost.
  • When quoting fees, do not quote a range, eg. ‘2% to 5%’ unless you also indicate where different services sit. If you have an idea of the services the potential client is likely to want, quote specifically.
  • Clearly explain the services you are offering. Unspecific terms such as ‘enhanced’, ‘premium’ or ‘gold standard’ must not be used.

Suitability Reports

In truth there is nothing new here and it represents what should be standard good practise.

The FCA also picked up on the recurring themes of poor quality recorded KYC and of overlong suitability reports crammed with pages of standard text. In our view, suitability reports should be no more than 3 to 4 pages long with sensible use of annexes.

Note: the bulk of this item is taken form an article by Phil Young of ‘360’

[hr]

The above is the lead article in our latest monthly News Notes – April 2017. Other topics in this edition include:

  • Social Investment
  • Discretionary Trusts & IHT
  • Join the Club
  • Personal Account Dealing
If you would like to subscribe to our News Notes, they are available for £24 per month. Please contact us to be included in our distribution list.

Haven Risk Management : FCA Compliance Consultants

Password Reset
Please enter your e-mail address. You will receive a new password via e-mail.