ISA Transfer Suitability Letter

seanhurst

Afternoon all,

Looking for some opinions please. We use suitability reports provided by a compliance firm. The issue i have is that they are very generic and i feel in places very belt and braces. My adviser prefers to keep the reports minimal, i have read lots of sample reports and there is a big difference.

What are you thoughts on what should be included in a ISA transfer suitability report and a cheeky ask i know but does anyone have any you would like to share with me?

Gustavo_Fring

The structure of ours is something like this:

Main Body of letter:

• Intro
• Client Objectives
• High level plan summary (Provider, fund value, transfer value)
• Our comments on relevant aspects of existing plans
• Recommendations and reasons why
• Investment/Fund Recommendations
• Charge Comparison
• Fees
• Next Steps

Appendices:

• A detailed plan summary
• Description of Product, Platform and Funds recommended
• Details of our Investment Process

benjaminfabi

Hi Sean

You're a directly authorised firm and you have an adviser who wants to keep reports minimal - WINNER!!!

Compliance firm reports are always going to be word heavy. But they don't need to be. Here's a SR for an ISA switch for an existing client that I prepared recently. I've obviously simplified all the numbers.

I like Aram's structure, but you can go further. I saw two key benefits in the switch I was doing - cost was easily beaten and the existing investment portfolio was awful. It didn't need anything more than I did to demonstrate that the recommended solution was suitable. All the evidence to back up what I've said in the report, is in the file. The client doesn't need, or probably want, a detailed breakdown of all the existing funds and their costs.

Some aspects would have triggered the need for more content:

• If it's a new client - risk profile would have had a few more paragraphs outlining a replay of the conversation around each aspect.
• If there's an initial fee - the cost comparison would have changed a bit.
• If it had been more expensive to move - I possibly would have recommended a fund switch in the existing plan/examined the other benefits a bit more to see if a value judgement could be taken.

Suse1969

Ours is very similar.

What we're doing, client objectives, recommendation and reasoning (with all the "why"s covered including the costs comparisons), what the downsides are, ATR (light or heavy depending on existing or new client) and investment strategy (again, light or heavy), and of course our charges and what happens next. General risk and product information are in appendices.

We're really trying to keep language simple and the reports short as this keeps it relevant to the client.

Gustavo_Fring

On the subject of keeping letters short and relevant, if an existing client has already had a description of our Investment Process in previous correspondence, we don't keep on including it every time we write to them. We put a sentence them giving them the option of requesting it, if they want to see it again. Similarly, we won't confirm to a client 'what an ISA is' every single time we write to them.