Thread on suitability reports. COBS 9.2 (suitability rule) talks about the need to establish client's financial circumstances, objectives, risk profile etc and then recommend an investment that is suitable to all of these. Then COBS 9.4 says you must explain why suitable in SR 1/
A particular investment can be suitable for the client's risk profile but is almost never directly suitable for a client's wider personal circumstances and objectives. How can, say, an XYZ Ltd SIPP be directly suitable for a client wanting to retire early on £Xk pa? /2
My point is that is almost always the financial plan that is suitable, not the individual investment. The plan to save a certain amount, use tax allowances, structure your finances in a certain way, these are the things that will help the client meet their objectives and 3/
... hence be suitable. The particular investment is just a good way of putting the plan into action. Suitability has two steps - the generic financial plan and then the particular investment. So handle your suitability reports the same way ... /4
Focus on why the financial plan is suitable and then cover why the particular investment is a good way of implementing the plan. The plan bit is the bit the client is really interested in and should be completely personalised. The latter can include templated text /5
Focus on 'the bit in the middle' - the financial plan - in your reports. If you try and directly link the particular investment to the client's objectives, you end up with comments like 'you wanted your investments managed on a discretionary basis' which is bollocks /6 and end
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