For every business, be it advising on clients’ wealth and financial planning or making widgets, the consistent use and application of business processes are critical.  This is particularly true for businesses subjected to intense regulation such as financial advice and planning.

It should have been a major surprise when the FCA published its findings into investor suitability failings in its thematic review last December.  I say should have been because we now expect to see better outcomes from such reviews, given the change that taken place within the advice landscape.

Since the FSA’s thematic review into investor suitabililty back in 2010, the exchanges between the regulator and those regulated has been antagonistic to say the least.  If the regulators’ thematic reviews, subsequent interventions, Section 166′s and, more recently, file reviews are representative of some of the investment and wealth advice sector, then something is clearly still not right.  Whilst there is evidence of good practice there is equally still room for improvement. Raising standards is important for the professionalism of our industry.

Investment suitability is what it says on the tin: ensuring that the investor and the investment are right for each other; not only when a new client relationship is established but on a regular and ongoing basis.

So what has failed?  In my opinion, three critical things: 1) an over-reliance on ATR toosls; 2) lack of attention to business processes; and 3) insufficient monitoring rendering management reactive to compliance and compliant risks within their client bank.

ATR over-reliance is an issue raised by the regulator and every professional should know that an ATR score should not determine the investment strategy.  Unfortunately, there are firms that still rely on this simplistic tick-box approach in the hope that it gets them off the regulatory hook – Wrong.

Providing financial advice is costly in time; not only in time spent with the client but also the time and resources expended in delivering advice within a regulated regime.  Unfortunately for many advisers, much of that time would appear to be wasted if the findings by the regulators second thematic review are anything to go by.  Not only do these processes appear to be failing the regulator’s fitness test, they risk failing the FOS test.

If the firms’ processes are weak, then by nature, the monitoring processes will either be non-existent or expensive in time and resources.  At best, they will be reactive rather than proactive with resources being devoted to fire-fighting and remedying failures.  Business intelligence and management information offers a major contribution to firms, particularly those with multiple advisers – it will highlight opportunity as well as risk.  Unfortunately, weak and poorly adhered processes rob firms of the powerful advantages that business intelligence and management information delivers.

If you want to reap the potential for process improvements, risk reduction and cost savings and insightful business intelligence for your financial planning firm, call me for an informal chat.  You may find yourself joining other forward thinking, progressive firms such as Informed Financial Planning, Fiveways Financial Planning and SAM Wealth.

David Roberts, creator and managing director, Harbour.  Tel: 07768 216305. Email:

About David Roberts

David is the creator of the Harbour Investor Suitability System  He works with elite, professional advice firms for whom customer service, customer experience, professional investment advice and business efficiency is the highest priority.  Previously, David has worked with family wealth offices and financial advice and planning firms as well as institutions such as Halifax Bank of Scotland, Deutsche Bank and Royal SunAlliance.  He has a passion for practical innovation – making processes work better, smoother, more efficiently and, delivering information that creates efficient business processes, business intelligence and informs managment decisions for his client firms.