It is only March, and the FSA has twice this year fired warning shots over risk profiling. So how should you respond?
Start by having an honest look at what your business does today. IFAs fall into three camps: those who don’t formally risk profile at all; those who use a ‘portfolio picker’ questionnaire; and those who use a structured, goal-based approach. Truth is, the FSA does not care which camp you are in; it cares about the link between your client and their portfolio. If you can prove – with written evidence – that Portfolio X suits Client Y then how you get there does not matter. It may be possible for an IFA with no structured process to establish that link, but it will not be easy. You ar...
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