OpinionJan 23 2014

Letter of the week

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It is always a pleasure to meet up with the FCA so we can hope to understand their current thinking and the direction of regulation going forward.

So it was with some surprise that I recently heard at an industry seminar from an FCA field operative that the FCA’s view on suitability reports is that, if they go beyond five or six pages, they are of little or no use as nobody reads them anyway. Also that if, God forbid, a case ever ends up in a court, the court would automatically disregard the suitability report from the case.

So what is the point of a suitability report? The advisory community believes it acts as a record of what was discussed, agreed and acted upon. Doesn’t it help to cover our backsides? Apparently not.

If that is the case, does the FCA adopt the same view with regard to risk profiling in that, irrespective of what was discussed, agreed and acted upon, they will have predefined/determined outcomes? Where is this all leading?

Philip D Stevenson

Chartered Financial Planner

ARK Financial Planning

Stalybridge

Cheshire