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Firm defends ‘done for you’ suitability reports

In response to a Money Marketing article raising adviser questions over the service, Just Reasons Why Letters has written in defence of advisers using its ‘no IFA input’ suitability report service for as low as £49.

Our service has evolved and has been painstakingly honed over the past seven years. The idea behind JustReasonsWhyLetters.co.uk is simple: we want to set advisers and paraplanners free to carry out more lucrative work by offering cost-effective ‘done for you’ reports within three working days.

Our clients (some of whom have been using us for years) tell us that they are very happy indeed with our service, the quality of content and the pricing. Once sent to our clients, the suitability letters are of course scrutinised from time to time by various compliance bodies as part of routine file checks and we have never encountered a single problem.

Anna Sofat is absolutely correct in that a service like JRWL was bound to happen. In fact, in a world where countless specialists already provide all manner of outsourced services to advisers, we are surprised that a ‘done for you’ option hasn’t appeared before. It is just another natural addition to the many outsourcing options already available. Like outsource specialists in other fields, JRWL has created ways to streamline processes and production in order to produce great personalised reports, whilst generating a profit through economies of scale.

As the name suggests, JRWL does not offer any paraplanning services. We are ‘Just Reasons Why Letters’. We offer a suite of reports including mortgage, protection, pension, pension switch, annuity, equity release, ISA and bonds. We do not anticipate providing suitability letters for more complex cases in the near future.

However, due to popular demand, we are currently formulating ways to provide ‘done for you’ pension transfer reports (which can currently consume a significant amount of adviser/paraplanner time), for which pricing will be substantially higher than our standard charges for other products.

We understand that ‘no IFA input’ may seem either unlikely or too good to be true, but as they have already gathered the information required and researched the individual case, we use that information to produce the report, in exactly the same way as they would in-house or through an outsourced paraplanner.

The personalisation of every report is very easy. We refer to the hard facts as recorded in the fact find and also to the softer facts which the adviser routinely adds to the fact find or other meeting notes. We understand a client’s circumstances, needs and priorities as quickly and easily as a compliance person conducting a file check; it’s the same information in the same format which we use to produce the suitability letter.

However, an added benefit of using JRWL is that we flag up any errors or omissions with the adviser to resolve them pre-sale and/or pre-compliance check.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. I would have made a comment on the original article but the comments section was disabled.

    I can’t really see what the problem with this service is, as long as it is used properly. The majority of our advice process is completed before the suitability letter is issued, through several meetings and discussions, all minuted in copious meeting notes and follow-up letters.

    I am not undermining the importance of a suitability letter but there shouldn’t be anything in the suitability letter that we haven’t already explained to the client in writing. The importance of the suitability letter is to bring all of this information together in one place.

    The trouble is that we use suitability templates from our compliance consultants, which take the pertinent information and then smother it in risk warnings and get-out clauses. God forbid that you don’t tell a client why you didn’t recommend a temporary annuity without proportion, or waiver of premium on a regular pension contribution.

    So the suitability letter becomes a bum-covering exercise, providing all the information that the FCA and our Compliance Department wants to see and aiming to keep claims chasers off our back. If a £49 suitability letter can meet these requirements without undermining the quality of advice provided to the client, then I’m all for it.

    • Hi Roger – thank you for your input on this article.

      We can’t see what the problem is either! This article came as a bolt out of the blue. We were very confused at first because we don’t have (and we have never had) a single adviser or paraplanner ‘hitting out’. If this was the case they simply wouldn’t use us!

      The importance of the suitability report is indeed to bring everything together, and it’s a shame that more clients are not encouraged to really ‘own’ this document. It tells THEIR story in plain English, it summarises their current position and it demonstrates very clearly how the adviser is going to help them shape their financial future.

      In many cases the reasons why letter is probably the one single document that the client can refer to in order to understand what went on! In our opinion, the adviser should be encouraging the client to read through the report from time to time both to refresh their memories and to consolidate their thoughts.

      Clients should also be made aware that their reasons why letter will form the starting point for the next review. Wouldn’t be useful if the client was asked to re-read the previous report and make notes prior to a review meeting?

      Your point about the core detail being smothered is an important one. We agree with the FCA’s general stance that anything non-essential to the core story should be included in appendices.

      However, we are not so aligned with Rory Percival’s statement that a suitability report should not be written from a ‘defensive’ position. No-one likes to go against the FCA grain, but with claims companies increasingly shifting their focus from PPI to financial advice in general, bum-covering is understandable. Advisers are naturally mindful that they should cover all points in the suitability report because even long-standing, trusted clients can be tempted to make a claim, sometimes long after the sale.

      At JRWL, we constantly review the latest claims stories and trends in an effort to guard against our clients falling foul of the same issues.

      Interestingly, JRWL have helped firms in defeating claims submitted through claims companies. In these cases, in very short time, we assisted the firms in identifying the relevant sections of the suitability report and they then referred the claims companies to the relevant sections. The claims ended at that point, so stopping claims at first base like this takes far less time and is therefore far less expensive than trawling through the entire file and submitting a full, long-winded defence.

      Though we say so ourselves, the pricing for our suitability reports, coupled with the additional input we provide is an absolute bargain!

      Regards

      Colin Tippin
      JRWL Director

  2. Be interesting what FOS make of the reports when they review a claim. The first documents they view are the suitablility reports !!

    I would be very suprised for any PI insurer that would want to provide cover if they are made aware of these suitability reports being issued to clients l

    • They are not being issued to the client as far as I can see. They are being issued back to the adviser, who will check them, amend any discrepancies and send them out. It sounds like a perfectly good service to me, for less complex cases.

      • Hi Phil – thank you for your input on this article – you have it in one!

        The adviser is ALWAYS responsible for the case, no matter whether the entire case has been processed personally, through a paraplanner, through in-house administrators – or outsourced.

        We do indeed return the finished report back to the adviser to check and amend prior to issue (remember that JRWL has no client contact at any time). Prior to sending the finished report to the adviser, we routinely highlight and note any minor discrepancies, errors or omissions for the adviser to identify and rectify quickly and easily.

        If we encounter something more significant which we cannot resolve we ask the adviser/paraplanner for clarification prior to proceeding.

        In this respect, we act as an effective additional check pre-sale, pre-compliance check and/or pre-case approval, which can potentially save the adviser valuable time on remedial actions (or even claims) later.

        Regards

        Colin Tippin
        JRWL Director

    • Hi Jamie – thank you for your input on this article. I have copied part of the comment I made to Roger Sole here…

      No-one likes to go against the FCA grain, but with claims companies increasingly shifting their focus from PPI to financial advice in general, bum-covering is understandable. Advisers are naturally mindful that they should cover all points in the suitability report because even long-standing, trusted clients can be tempted to make a claim, sometimes long after the sale.

      Interestingly, JRWL have helped firms in defeating claims submitted through claims companies. In these cases, we assisted the firms in identifying the relevant sections of the suitability report and they then referred the claims companies to the relevant sections. Ending the claims at first base like this takes far less time and is therefore far less expensive than trawling through the entire file and submitting a full, long-winded defence.

      Without wishing to sound negative, we could all be spending much more time on claims over the next few years but a solid reasons why can help to prevent claims arising in the first place.

      I can confirm that in seven years of production, we have had no cases referred to FOS.

      I am assuming you have file audits on your files from time to time, as do advisers at other firms. It’s a fact that our reports are approved by Compliance in many cases far easier and quicker (and with less remedial action) than if the adviser had compiled the suitability report personally.

      This is because this is all we do – and we are very good at it.

      As far as we are aware, PI is unaffected by outsourcing but for sure it is affected by claims. One of our prime objectives is to be transparent by using easy to understand language. JRWL wants to protect the client, the firm and the adviser at first base so claims are far less likely to arise in the future.

      PS – We carry our own PI cover too!

      Regards

      Colin Tippin
      JRWL Director

  3. With all the talk these days about ‘soft facts’ (in addition to hard facts), one wonders how anyone can write a fully compliant SR without ever having met the client. I certainly wouldn’t wish to try.

    Okay, perhaps in the simplest of cases it can be done but, if the scenario/transaction is THAT simple, you may as well do it yourself.

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