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IFAs risk fines over wrap files

Murray: ‘Put it in writing’
Murray: ‘Put it in writing’

Transact head of sales and marketing Malcolm Murray has alerted IFAs that they may risk fines in the future if they fail to document the suitability of their chosen wrap for every individual client.

At the Money Marketing RDR Invitational in London last week, Murray said the FSA may fine advisers who have not justified their decision to place a client on a particular wrap in writing.

He said: “I beg IFAs – make sure that the wrap you have chosen is suitable for every single client that you put on it and test the suitability against the due diligence that you will apply to that particular wrap service.

“Then make sure you put that in writing, give it to the client and keep it on file because in five years time you might be very happy, the client might be very happy, but the FSA may not be unless you have that in writing. So please, do not get into a situation later on where everybody is happy except the FSA and you get fined for not having made the recommendation in writing.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. Richard Brydon 8th May 2010 at 1:32 pm

    We incorporate our reasons for using the platform that we use in the suitability report.The problem will always be that anyone can always challenge your reasoning and that’s exactly what the FSA would do. And why would they challenge the advice? Because they can, whether it’s in writing or not. As the Fat Controller might say: Just because it’s in your letter, it doesn’t mean that the client understood it. You cannot win whatever you do.

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