In conversation with advisers: Meeting the FCA's 'suitability' requirements

clock • 2 min read

Partner Insight: Flora Maudsley-Barton, managing director of Parsonage Financial and Kerry Nelson, managing director of Nexus Financial met in London recently to discuss the criteria laid out by the Financial Conduct Authority (FCA) with regards to the adviser-client 'suitability' requirements.

In the fourth video of the series (see above), Flora Maudsley-Barton and Kerry Nelson talk to Julian Marr, Editor of Professional Adviser about what is suitable for that individual client, client objectives and the main concerns of the regulators - the FCA and the Financial Ombudsman Service (FOS).

Kerry Nelson says: "Suitability is such a hot topic now. The [financial] regulator wants us to explain what is suitable for the client, the client's needs and make it relevant to that particular client."

Nelson admits that it is hard for some of the advisers to "get a handle on" these suitability requirements laid out by the FCA.

Maudsley-Barton agrees that advisers are under pressure to meet the FCA's suitability requirements when it comes to the client's objectives, to review these and the individual products recommended for a particular client.

The FCA has made it very clear that a standardised investment approach should not be viewed as a one-size fits all solution.

"The suitability criteria we use at Nexus [Financial] is a process called ‘buddy check.' The report written by our para planner about an individual client is passed to the adviser - it is a sort of ‘sense check', then the adviser can recommend what the client wants."

Nelson adds: "I think when it comes to suitability requirements, the main thing the FCA worries about is the concept of a centralised investment proposition (CIP), how this works and outsourcing to DFMs.

"I think what the regulator wants us [the adviser] to do is to explain things better in terms of what we are doing, demonstrate due diligence in the solutions we are putting together for the client, whether it is a (CIP) or part of outsourced systems."

Please visit Adviser Points of View, a site created by Incisive Media (publisher of Professional Adviser) in partnership with Architas.

More on Investment

NextWealth MD Hopkins on staying ahead of advice sector changes, data challenges and flattening MPS fees

NextWealth MD Hopkins on staying ahead of advice sector changes, data challenges and flattening MPS fees

Making technology work better

Katrina Lloyd
clock 03 July 2025 • 9 min read
IFAs look to boost clients' private markets exposure

IFAs look to boost clients' private markets exposure

Expect increase in stock market volatility

Jen Frost
clock 02 July 2025 • 2 min read
Winds of change: Private markets access for retail investors

Winds of change: Private markets access for retail investors

Investing in LTAFs, accessibility aside, needs careful consideration

Dorian Hughes
clock 02 July 2025 • 5 min read

In-depth

Why Gen Z still trusts financial advisers in the age of finfluencers

Why Gen Z still trusts financial advisers in the age of finfluencers

A digital generation with a human touch

Sahar Nazir
clock 23 June 2025 • 4 min read
QROPS class actions: What next for frustrated UK expats?

QROPS class actions: What next for frustrated UK expats?

Calls for reform across the board as insurers fight back in IoM

Isabel Baxter
clock 29 May 2025 • 7 min read
AI on trial: FCA's Live Testing opens new path for advisers

AI on trial: FCA's Live Testing opens new path for advisers

Offering regulated firms a controlled space to trial advanced technologies

Sahar Nazir
clock 21 May 2025 • 7 min read