What is a financial adviser suitability report?
The report should help you understand what is being recommended, why it fits your circumstances and the important costs or risks involved.
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What is the purpose of a suitability report?
For regulated advice where a suitability report is required, the document records the personal recommendation and why the adviser considers it suitable based on the information collected.
What should you look for?
What if the report does not match what you discussed?
Raise the issue before proceeding. A suitability report is not useful if your circumstances or objectives are recorded incorrectly.
Keep the report
It can be an important record of why a financial product, investment or planning action was recommended and may be useful in future reviews or if you later change adviser.
Read the reasoning before the recommendation
Start by checking the report's description of you. The objectives, time horizon, financial position and ability to bear losses should match the information you supplied. A polished report based on the wrong facts is not made useful by the quality of its charts.
Then identify the actual recommendation. What should change, what should remain and what should you do first? Separate the product or investment choice from the wider planning decision. Moving a pension, changing a withdrawal level and changing investments can have different consequences even when they appear in one report.
Look for an explanation of alternatives. The report should help you understand why the proposed course fits better than relevant options such as retaining the existing arrangement, using a different service or taking no immediate action. Ask the adviser to explain any option that seems to have disappeared without discussion.
Check costs and disadvantages in the same sitting
List initial advice, implementation, ongoing advice and underlying product charges separately. Where the report compares old and new arrangements, ask whether both totals use the same assets and time period. A lower fund charge can coexist with a higher overall cost after advice and platform charges are added.
Read the disadvantages with equal attention. These could include reduced access, loss of an existing benefit, investment uncertainty or extra administration. Ask what would happen if an assumption proves wrong and which parts of the decision are difficult to reverse.
For an illustrative pension review, the useful comparison is not merely old provider versus new provider. It is the existing benefits and service, the proposed benefits and service, the total charges on each side, and the specific reason for accepting any loss or additional cost. A recommendation to retain a plan can be a meaningful advice outcome.
Questions to resolve before implementation
Ask the adviser to explain any passage you cannot repeat back in ordinary language. Record the question and the answer, especially where it changes your understanding of risk or cost. If the facts or proposal change materially, ask whether the report needs correcting rather than relying on a separate verbal reassurance.
Confirm whether accepting the advice also authorises implementation. Signing to acknowledge receipt, agreeing to pay and authorising a transaction are different actions; the documents should make their purpose clear. Check who submits applications and who confirms completion.
Keep the report, fee agreement and later confirmations together. A report records advice at a particular time using particular facts. It is not a guarantee of investment returns or a permanent instruction to ignore later changes in your circumstances.
Sources and further reading
MoneyHelper - Choosing a financial adviser ↗
