Ongoing Suitability
arongunningham
Member
in General
How is your firm tackling ongoing suitability assessments when you have a client that is not able to attend an annual review meeting (or doesn't want to for whatever reason).
Are you able to say 'we can confirm the recommendations are still appropriate' if you've not met (or discussed in some other way) their personal circumstances.
Can you say 'you haven't told us anything's changed, so we assume nothing has'?
Do you have a process whereby if you are unable to confirm suitability (because the client is too busy to meet you, for example) that you will disengage the client after a period of time?
Comments
If it were me, I would write to the client acknowledging that they did not want to meet and you have had to carry out your periodic assessment of suitability based upon the information you have on file. Instruct the client to let you know if anything has changed and if it has, they should let you know immediately as it could impact your advice.
I would add that you have obligations to both the FCA and the ICO to ensure the information you hold on the client is up to date and correct and it is for that reason that should they decline the next annual meeting you will be unable to fulfill your obligations and therefore you would need to terminate your ongoing relationship. (obviously fluff it up a bit)
COBS Section for Reference refers to the extent of information previously collected. see below:
Periodic assessments: MiFID business COBS 9A.3.8 EU03/01/2018
52(5) Investments firms providing a periodic assessment of the suitability of the recommendations provided pursuant to Article 54(12) shall disclose all of the following:
(a) the frequency and extent of the periodic suitability assessment and where relevant, the conditions that trigger that assessment;
(b) the extent to which the information previously collected will be subject to reassessment; and****
(c) the way in which an updated recommendation will be communicated to the client.
@arongunningham our network (rightly or wrongly) has interpreted it as you and @Nathan say.
If client review cannot be conducted then we issue a letter saying "on what we know it's still all good, but if anything has changed since we last spoke then get in contact" and we give them a list of things that might have changed / impact their advised solutions.
If at the following review date they still do not engage with the review process we have to disengage as their adviser.
Thank you both.
To confirm the normal process (when the client is able to meet the adviser) our process is:
Annual Statement (value 365 days ago to now, etc etc) > Meeting with Client > Ongoing suitability assessment.
so 2 documents and 1 meeting.
Is this the same for you?
Hi Aron
@Nathan is spot on.
You should have a disengagement process as Nathan describes for clients like this. Especially if the reason is that the client does not want to do it.
With regards to the process, personally I would send them valuations etc as well as a high level overview of the information you have on them as well as the risk profile and ask the client to confirm that the information remains the same. That way you can prepare for any changes, discuss them at your review meeting and potentially provide them with your recommendations.
The other way, you could learn of something significant at the meeting that could change your whole advice which could result in the need for a second visit.
I asked that second question because I wonder if it would be safer to including the Ongoing Suitability Assessment into every valuation report (before the meeting) so that you're 100% compliant.
Then, if things change as a result of the meeting, revise the assessment with new recommendations?