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On-going suitability – meeting the FCA / MiFid regulatory requirements

FCA regulatory requirements

Many of you have already received requests to log into your Personal Finance Portal accounts and update your information. This request was not something that we started simply because we thought that it was a good idea (though it probably is!). We have requested the information because it is now an FCA requirement that we assess the ‘on-going suitability’ of any investment or pension that we have provided and that we must review this advice at least annually. We require full details of your current financial situation and your current circumstances in order to complete the review and that is why we have requested your help.

You can imagine that with over 100 clients to review this is a huge task: Sarah Harvey is in charge of this project and she has asked me to thank you for your help. To comply with the requirements, she has to send out at least three emails to each client and prepare four reports. Another report, the fifth, is being supplied you direct by your investment platform (Nucleus). When the reports are complete, they are all available for you to view on line. The FCA’s intention in introducing this requirement is to reduce the cost of advice and while I fully concur with that aim, I am a little dubious that adding so much time and ‘paperwork’ to the process is going to help.

The extensive regulatory changes that were brought in by The FCA during 2018 now demand that we are in regular contact with our clients, provide them with regular ongoing advice, and that we annually assess the ongoing suitability of all our past recommendations. The only practical and economic way to meet these requirements is for clients to use their online account.

Fortunately, almost all our clients are using their online account. According to The Office for National Statistics: “In 2018, 90% of adults in the UK were internet users” and this number is increasing year on year.

While for some time, we haven’t taken on any new clients who do not use their online account, the regulatory changes have forced us to reluctantly make some hard decisions about clients who do not use the internet. The new requirements have made them too difficult to manage any other way.

PaperCloud Elite – your access to your live paperwork file

In 2006 I made the bold decision to go paperless using the software from Watermark Technology. I spent some time investigating the options and I even travelled to Suffolk and paid for a consultancy with an IFA who was already paperless (they were very rare in 2006). Watermark were a great choice and with the help of Danielle who scanned everything very carefully we eliminated 25 filing cabinets and shredded three tons of paperwork by May 2007. It’s the stuff of nightmares to think how much paper we would have had by 2019 if we hadn’t had the foresight in 2006.

Going paperless not only saved space it allowed all clients to have online access to their live paper file at any time of their choosing using Paper Cloud. This week we are upgrading to the latest version of Watermark’s software called Paper Cloud Elite which means that you will need new log on credentials to access your paper file. The new software is a ‘next level upgrade’ and it will allow us to be more efficient – please accept our apologies for the inconvenience. Your new log on credentials will be organised by Sarah but because she is working the on-going suitability project, I hope that you will be patient.

We made The Times

In case you missed it we made The Times last month and you may like to take a look by clicking the link.

The petition Revoke Article 50 and remain in the EU

I started as an IFA in 1992 with the aim of making ordinary people better off and my first comment on the 24th of June 2016 was “we have elected to be poorer”. It is tragic how much poorer we have already become, and so much irretrievable economic damage has already been done that it is going to take a decade to recover. If we leave the EU much more damage will follow and it still not too late for the country to come to its senses. I was very proud that my family were at the Peoples Vote march in London last Saturday. If you haven’t already done so, click the link and add your name to the revoke article 50 petition. As I write the number of signatories is approaching six million.

If you have any queries or if there is anything that you want to discuss, please get in touch. Please remember that sending a secure message using your online account is always the best way to contact us.

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