Lets discuss annual financial planning reviews or, to use FCA language, to comply with the periodic assessment of suitability rules:
“Firms providing investment advice must agree with a client whether a periodic assessment of suitability will be performed. If periodic assessment is to be performed it must be at least annually and the continued suitability confirmed in writing.”
Most firms provide ongoing service to their clients and this is usually at least annually. So far so good, no fundamental changes of practice required by most if not all firms.
To quote further:
“Where an investment firm provides a service that involves periodic suitability assessments and reports, the subsequent reports after the initial service is established may only cover changes in the services or instruments involved and/or the circumstances of the client and may not need to repeat all the details of the first report.”
In summary the ‘periodic report’, must contain an updated statement of how the existing investments meet the preferences, objectives and other characteristics of the client.
Periodic disclosure of aggregated costs which have actually been incurred for investment services and financial instruments, must be provided to each client with which the firm has or has had an ongoing relationship with during the year, annually on a personalised basis.
Annual Financial Planning Reviews
So, if the FCA require you to write to each client each year and confirm suitability and costs why not use this as an opportunity to engage positively with the client? Yes, our annual financial planning reviews include the required regulatory information but they can also include a financial planning journey overview, some financial forecasts, a portfolio review and maybe an overview of unused allowances? This is why we created our Annual Planning Review service!