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Scottish Life: Audit trail the key to ‘suitable’ advice

In a video interview with FTAdviser, Lorna Blyth, investment marketing manager of Scottish Life, explored what action advisers should take following the regulator’s comments about the use of model portfolios and the FCA’s review of investment advice last year.

Back in 2012 the FSA raised concerns about the processes used by advisers when considering model portfolios and whether clients were being shoe horned into these funds when alternative investment vehicles could be more suitable.

Speaking to FTAdviser’s Emma Ann Hughes, Scottish Life’s Ms Blyth said: “As with anything, it is about documenting conversations that you have with the client and making sure that you have everything on file so that when the FCA do come knocking you can show that a clear process has been followed.

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“The FCA did a thematic review of investment advice a year back and while only one in five - it was quite a flawed sample actually - gave unsuitable advice, there was something like almost 60 per cent where the cases were unclear.

“The reason for that was really lack of documentation. I think there is good advice getting out there but it is just about making sure that is all documented.”

Click here to watch the video.