Regulation  

Tenet plans to work with providers on portable fact find

Tenet plans to work with providers on portable fact find

Tenet is looking to work with product providers to put together the technology to create portable fact finds.

It follows the guidance on simplified advice published by the Financial Conduct Authority last week.

The FCA decided there is no reason why a client can’t bring over their fact find from a previous adviser and give it to their new one to form the basis of fresh advice so long as the intermediary checks the information is correct.

Caroline Bradley, group regulatory director of Tenet, said the benefits of a portable fact find would be maximised by technology.

She said: “As a network, Tenet would be interested to work with product providers in technology development.

“This will give the client the opportunity to store and manage personal information and may reduce the cost of the fact find in the future.

“Most advisers will however be wary of clients who frequently switch adviser in order to minimise cost, as advisers seek long term relationships with their clients.

“The key point will be the need to confirm the accuracy of the data before using it.”

But she added the most likely use would be sending a pro-forma ahead of an annual review to ask the client about changes to their circumstances, which is already widely used.

Ms Bradley added that the increased use of technology would allow advisers to spend more time on in-depth conversations about a client’s needs.

The FCA’s willingness to allow portable fact finds appears to be a change of heart from earlier in the year when the regulator consulted on this guidance.

At that time the FCA said that a portable fact-find would be more convenient and cost-effective but added standardisation could most easily be achieved on the “objective” information provided in a fact find, such as a client’s name, address or job.

The regulator questioned whether the same was true with the “qualitative” information, such as the client’s knowledge level.

David Boyhan, associate director of compliance consultants TCC, previously known as The Consulting Consortium, said the idea of a portable fact find was good but it comes with “significant” regulatory risks for advisers.

He said: “Firms will need to satisfy themselves that the information is correct and up-to-date, otherwise there is a risk of unsuitable advice being given.

“Ways to mitigate these risks include undertaking due diligence on the firm that completed the original fact find or asking clients to review and confirm the information is accurate, or update as necessary.

“Alternatively, firms may wish to play back the key details on the suitability report during the discussions with their client, such as income, assets, liabilities, to verify their accuracy.”

In addition, he said, all firms have their own internal standards which mean fact finds often have significant differences.

Mr Boyhan said: “The steps needed to mitigate the risks associated with this initiative does mean that any time saved by porting may be relatively small.”