Suitability report requirement on ISA provider change?
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kdanks
Posts: 10 Forumite
Dear all,
I wonder if someone can explain in what circumstances an IFA is required to provide a suitability report when a customer wishes to move an ISA to a different provider.
This relates to an ISA on which the IFA advised around 10 years ago. Based on that advice, the ISA was arranged by him with an investment management firm and he has continued to be paid adviser fees from the ISA ever since. Circumstances have changed and alternative options are being considered, including moving the ISA to another provider.
In the event of such a transfer the IFA says that his firm "are required to prepare a Suitability Report for all regulated advice recommendations given", for which they would charge £500 + VAT. I'm not sure if that's a contractual or statutory requirement, or whether he is just assuming that the customer (a relative of mine) would ask him to advise on making such a transfer.
Any guidance would be gratefully received. If more details are required, I have them all ready, but I thought I'd try to keep this concise.
Regards
K
I wonder if someone can explain in what circumstances an IFA is required to provide a suitability report when a customer wishes to move an ISA to a different provider.
This relates to an ISA on which the IFA advised around 10 years ago. Based on that advice, the ISA was arranged by him with an investment management firm and he has continued to be paid adviser fees from the ISA ever since. Circumstances have changed and alternative options are being considered, including moving the ISA to another provider.
In the event of such a transfer the IFA says that his firm "are required to prepare a Suitability Report for all regulated advice recommendations given", for which they would charge £500 + VAT. I'm not sure if that's a contractual or statutory requirement, or whether he is just assuming that the customer (a relative of mine) would ask him to advise on making such a transfer.
Any guidance would be gratefully received. If more details are required, I have them all ready, but I thought I'd try to keep this concise.
Regards
K
0
Comments
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The circumstances under which suitability reports must be provided are documented at https://www.handbook.fca.org.uk/handbook/COBS/9/4.html0
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In the event of such a transfer the IFA says that his firm "are required to prepare a Suitability Report for all regulated advice recommendations given", for which they would charge £500 + VAT. I'm not sure if that's a contractual or statutory requirement, or whether he is just assuming that the customer (a relative of mine) would ask him to advise on making such a transfer.
I read that as that if you ask the IFA for advice then that is what they would charge. Advice would see a suitability report issued.
If no advice is sought and given then there would be no charge (or suitability report requirement).0 -
The circumstances under which suitability reports must be provided are documented at (link removed because I'm a new user and forum won't let me post it)
Very useful, thank you. Pretty clear - the requirement arises if a firm makes a personal recommendation to a client about buying or selling investments like the ones in question.I read that as that if you ask the IFA for advice then that is what they would charge. Advice would see a suitability report issued.
If no advice is sought and given then there would be no charge.
Yes, thank you. I think this fills in the rest of the picture. Unless my relative has some kind of contractual obligation to ask the IFA for advice on the transfer (which I don't know), then if the IFA isn't asked to advise, they couldn't charge.
Anyone have a different view?
Kind regards
K0
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