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FSA: Paraplanners should challenge advisers on suitability

The FSA says paraplanners should be challenging advisers over suitability letters to ensure client needs are being met.

Speaking at the Institute of Financial Planning paraplanner conference this week, Chris Hewitt from the FSA’s investment intermediaries department, said paraplanners should be looking to examine what the objectives of clients are with regard to centralised investment propositions.

He said: “When you see generic statements on file, you should challenge the adviser to identify what is driving the objective for the client.“

Hewitt said when making switches, paraplanners should question the validity of the switch.

He said: “Paraplanners should question whether there is a valid justification in light of the client’s specific needs and objectives and the potential additional costs involved.”


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Michael Wainwright 25th May 2012 at 2:38 pm

    Hewitt is right. Paraplanners and typist should challenge advisers, (and advisers should ask them to do so) if they do not understand anything or advice does not seem to match needs. Advisers will know all about their clients and fully understand why they are giving certain advice. But this does not mean that they get it all down on paper properly, or in a compliant manner, or in a manner that can be understood by the client, the FSA or FOS. Why wait for the compliance officer to pick things up in a file check when paraplanners are an idea tool and may spot things before they become a problem?

  2. The FSA should try doing its own job properly first before making stupid statements like that. If my paraplanner questioned my advice it would be the last thing they ever did in my employ. We all have a job to do and we should stick to that.

  3. @i’m the IFA

    What an arrogant view! God forbid you are ever challenged on your advice to a client. A decent adviser should welcome queries as if you are confident in your advice there should be no reason to worry. I feel for your paraplanner.

    RDR has many many faults, ridding the marketplace of certain advisers is not one of them.

  4. That would be like biting the hand that feeds you as often the advisers employ the paraplanners. It does irk me when the tail starts wagging the dog.

    Mr Hewitt shows that he does not understand the industry nor the dynamics of the relationship between advisers and paraplanners. It should be up to the firm to develop proper processes so that any CIP works compliantly.

  5. Unfortunately most of the ill-educated poorly-qualified advisers I have had the misfortune to work for not only formulate non-compliant advice but wholly unsuitable advice on many occassions. As a paraplanner I will readily question advice that is non-compliant, proposing changes which I see as better suited – in 99.99% of the times the adviser is happy to run with my changes. Anything to ensure the comission keeps rolling in….. and the client continues to be duped into beliveing that their adviser knows what they are doing…..

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