The new suitability risk - when understanding and investment reality don't match

Financial advice has always been built on a simple principle: understand the client, then recommend accordingly. But the definition of "understanding" is changing. Moving beyond COBS minimums, under Consumer Duty, firms are no longer judged solely on whether they have gathered information or provided disclosures. They are increasingly expected to demonstrate that clients genuinely understand what they are being told and that the resulting investment solution aligns with that understanding. This is a higher bar. And it exposes a new category of risk. From disclosure to decision-making ...