"Even if you aren’t recording the meeting, your client’s voice should still come through the fact-find loud and clear."
In a speech on improving the suitability of financial advice the FCA's director of financial advice supervision, Debbie Gupta, said that although recordings aren't a requirement, they "provide the most robust evidence available for a firm to make its case in the event of a complaint".
The FCA's research found that suitable advice is lower for more complex issues, with only around 50% of the advice given on DB transfers deemed to be suitable.
Gupta said that one of the main causes of unsuitable advice is where the risk level of the recommended solution does not match the risk the client is willing or able to take.
She said the FCA still sees DB transfer files where the adviser has not recorded details of other pensions, the state pension due, or the client’s expected income in retirement, describing this as "essential information".
Gupta said she also sees a number of instances of bias, especially in DB transfers.
She explained: "In one case, we saw an adviser paint a picture that DB pensions are old fashioned and restrictive as the client has no freedom or control and that utilising the pension freedoms is nothing but positive.
"Let me be clear. Our view is that the starting presumption for financial advisers should be that transferring out of a DB pension is unlikely to be in the consumer’s best interests. So consider the way you present information and whether this could be influencing the client to take a certain course of action rather than giving them what they need to make an informed decision."
Citing an example of good practice, Gupta suggested that instead of recording that the client wants flexibility, advisers should record something more specific such as the client wants to semi-retire, set up a part-time consulting business, and this will give them more free time to spend on their allotment.
In her speech, she expanded: "Even if you aren’t recording the meeting, your client’s voice should still come through the fact-find loud and clear. Consider using the client’s own language and phrase. When we looked at the advice given to British Steel scheme members in 2017, this was very evident. The files where the client’s genuine feelings were recorded in their own words often resulted in better quality advice.
"This is because the adviser could understand and empathise with the client and tailor the advice to the individual client. Under challenge, or scrutiny, it helped explain the context in which the advice was given, and provided insight into what the client really wanted and needed."
