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.”