We don’t believe in tick-box compliance and this goes for file reviews too.
Whilst we will check your files hold the documents required to meet your regulatory obligations, our main focus is on the collation of know your client (KYC) information and the suitability of the advice provided. If the file is requested by the FCA or you receive a complaint, these aspects usually make the difference between it being deemed suitable or unclear.
One of the 3 FCA objectives is consumer protection and so suitability of advice will always be high on its radar. Therefore, having files independently reviewed should be a priority for all advisory firms.
Although each file is different and will have some elements that require more attention than others, we ensure our review process is consistent. This enables us to establish the overall suitability of the advice you have provided.
Whilst undertaking a file review, we will ensure:
- The file is complete and chronologically correct
- KYC has been fulfilled through the recording of hard and soft facts and that these are consistent and sufficient to support your recommendation
- Income and expenditure are broken down and all assets clearly stated
- The source of funds is identified and commensurate with the client’s position
- Vulnerability has been addressed, where appropriate, along with any other client needs
- Client objectives are stated clearly, in line with the KYC
- Anti-money laundering requirements were fulfilled at an appropriate time
- Research substantiates the recommendation
- Costs and charges are disclosed accurately and clearly and match the recommendation
- The client’s attitude to risk and capacity for loss have been fully established/assessed and appear consistent
- Any anomalies in the ATR questionnaire have been challenged and documented, along with an audit trail for the stated outcomes
- A suitability report has been provided at the appropriate time and this reflects accurately the details on file
- The suitability report contains the essential regulatory elements and information, enabling the client to understand the recommendation, costs and charges, disadvantages and risks
- The recommendation appears to be the most suitable and affordable for the client’s objectives and overall position.