The Financial Conduct Authority has 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.
In a 48-page finalised guidance paper published today (28 September) the regulator stated a consumer’s personal repository of information could be used, in line with applicable data protection rules, and with the client’s express permission, as the basis for a conventional advice consultation.
The process is known as 'porting'.
However, in the finalised Financial Advice Market Review guidance paper the watchdog stated the new advice firm would need to have suitable arrangements in place to confirm the accuracy of the data before it could be used.
The regulator also stated in obtaining the necessary information about their clients to assess suitability, a firm is entitled to rely on the information provided by its clients, or potential clients, unless it is aware or ought to be aware that the information is manifestly out of date, inaccurate or incomplete.
The FCA stated: “A pre-completed fact find, therefore, attested by the client as correct and up-to-date could provide the basis for that suitability assessment.
“However, it remains the responsibility of the firm looking to give advice to ensure that it has the information it needs to provide that service, that the information is accurate and up-to-date.
“The firm cannot seek to shift the responsibility of deciding which information it requires to provide advice, onto its client.
“However, a firm can ask the client to confirm that the information is complete and up-to-date as a means of meeting this obligation.”
In order to obtain reassurance that the information collected is reliable, the FCA stated advisers using a pre-completed fact find may wish to incorporate into their advice process an explicit opportunity for the client to review any pre-captured information and to record their approval of this information.
The watchdog said firms should give careful thought to how they do this.
When a client is asked to review information online, the FCA stated firms might consider how any online tool mitigates the risks that a client may not notice information which is no longer current.
For example, the FCA stated clients may find it more convenient to review information in manageable sections rather than being asked to download a large document containing information.
Firms were also told by the FCA to consider how behavioural biases can potentially affect clients’ ability to provide reliable information, for example, by looking at whether the language is clear and comprehensible and avoiding misleading, confusing, imprecise and excessively technical language.
Similarly, the FCA said firms may consider that the reliability of information may be enhanced by asking a client to confirm information by section rather than by completing a single tick box or similar to confirm their details as a whole.
Garry Heath, director general of adviser trade body Libertatem, said most of what the regulator had stipulated in relation to porting a fact find seemed fairly logical and should cut down on the amount of time it takes to give advice.