Assessing suitability: FCA guidance
Assessing suitability: FCA guidance

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Assessing suitability: FCA guidance
  • Background to the March 2011 Guidance
  • Overview of the March 2011 Guidance
  • Key findings of the March 2011 Guidance
  • Establishing the risk customers are willing and able to take
  • Key findings on establishing risk
  • Making a suitable investment selection
  • Key findings on investment selections
  • Background to the July 2012 Guidance
  • CIP concerns and how firms can address them
  • more

BREXIT: As of exit day (31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this Practice Note. For further guidance, see Practice Notes: The impact of Brexit on the MiFID II regime.

This Practice Note highlights key aspects of key materials produced by the Financial Conduct Authority (FCA) and its predecessor, the Financial Services Authority (FSA) since March 2011 about the advice process. The FCA has also published a web page which brings together in one place key material about the advice process and assessing suitability and should be an important reference point. In particular, this Practice Note considers:

  1. FSA-finalised guidance FSA FG11/5 on assessing suitability—establishing the risk that a customer is willing to take and making suitable investment decisions (the March 2011 Guidance)

  2. FSA-finalised guidance on assessing suitability—replacement business and centralised investment decisions (the July 2012 Guidance)

  3. FCA thematic review report for wealth management firms and private banks—suitability of investment portfolios (the December 2015 Report)

  4. FCA thematic review report on assessing suitability—research and due diligence of products and services (the February 2016 Report)

  5. FCA-finalised guidance on streamlined advice and consolidated guidance (the 2017 Guidance)

This Practice Note also looks