There are two concerns. The first, most obviously, is based on the cross-cutting rules. A client in an 'old' portfolio does not “avoid foreseeable harm”, as the client is in a selection of investments you may no longer deem to be appropriate.
The second is that the client may be considered “vulnerable” – they may not be responding to rebalance advice requests because they do not understand the information being provided; or have developed a health condition that prevents their response. That may fall foul of the requirements under outcome four (consumer support).
This is a red flag – one that should prompt action. Work with your platform provider to identify who these clients are; and work to resolve this issue.
You may, for example, wish to consider an appropriate outsourced solution that meets these clients’ needs.
Also, review your communications and customer support to make sure you can confidently say that your clients understood the advice you were giving and the consequences of not responding.
Quality advisers are likely to be doing much, if not all, of this for your clients. However, doing it is not enough. The regulator is clearly going to want to see evidence for the steps you have taken.
Therefore it is vitally important that financial advisers carry out assessments based on these four outcomes, discover where any weaknesses may lie and seek to take appropriate action so you can demonstrate that you continue to deliver good outcomes to your clients.
David Tiller is commercial and propositions director at Quilter
