Suitability Reports Made Simple for Advisers

The Place of The Suitability Report

As an IFA, you know that before any financial plan is drafted, the real work begins with getting to know your client. Understanding their goals, worries, ambitions, and current financial situation forms the foundation of your advice process.

Once you've established that foundation and created a financial plan that acts as a roadmap for your client's financial strategy, the suitability report becomes your essential compliance tool. This is where you document your review, confirm everything remains aligned, and justify your recommendations. Your suitability report doesn't need to repeat the entire financial plan. The shorter and clearer, the better.

So how can you, as a busy financial adviser, create suitability reports that satisfy both the FCA and your clients while saving you valuable time?

Here are some key elements to focus on in crafting your suitability report:

1. Make Your Reports Easy to Follow with an Upfront Summary

One of the best ways to keep your documentation digestible is to include a simple summary upfront, followed by appendices with all the finer details. This approach gives your clients the key information without forcing them to wade through pages of technical jargon, while still providing access to specifics if they want them.

The FCA has made it clear that how you present a report is just as important as what's in it. If your client can't understand it, you're increasing your compliance risk, and it's failed its purpose.

2. Remember the True Purpose of Your Suitability Report

Your suitability report isn't just a compliance document; it's a communication tool for your clients. It should be easy to read, personalised, and written in your clients own words. When your clients see their own concerns, aspirations, and specific needs reflected in your documentation, they understand that your advice is genuinely specific to them. Always clearly outline the scope of your advice, including anything you've explicitly excluded.

Recent FCA updates have given you more flexibility in how you format your advice. This offers you an opportunity to move away from dry compliance templates and create more personalised documents. Put yourself in your client's shoes—would your suitability report make sense to them? Would it accurately reflect what you discussed in your meeting?

3. Double-check Your Risk Assessment Documentation

As you know, risk is a fundamental part of your advice process, and your suitability report must clearly show how your recommended strategy and investments match your client's risk profile. Your documentation should make it easy for clients to spot any inconsistencies. When your client's risk appetite and risk capacity don't align, you should default to the lower of the two—a critical aspect of your FCA regulatory obligations.

4. Ensure Your Client's Goals Are Documented Using SMART Principles

When documenting client goals in your reports, always structure them using the SMART framework: Specific, Measurable, Achievable, Realistic, and Time-sensitive. Rather than writing "Client wants to save for retirement," your documentation should read more like "Mr. Smith aims to accumulate a pension fund of £350,000 by age 65 (2040), requiring monthly contributions of £750, to provide an estimated annual income of £15,000."

Your Reports Before Automation: "Client wants to invest for retirement and is concerned about market volatility."

Your Reports With Automwrite: "Mrs. Jones aims to invest £1,200 monthly into her SIPP until 2035, with a medium-risk portfolio that balances growth potential with her expressed concern about market volatility, as discussed in our meeting on 15th February."

5. Create a Clear Financial Snapshot of Your Client's Situation

Your suitability report should paint a concise picture of your client's financial situation without unnecessary details. Focus on highlighting relevant assets and investments that impact your advice, leaving out personal items like vehicles unless they have financial relevance to your recommendations. Give your client a clear sense of their financial capacity, challenges, objectives, and priorities.

6. Document Your Investment Recommendations Clearly

Your investment section needs to be straightforward and transparent. Document exactly what your client is invested in, all costs involved, and performance information. Most importantly, justify why these investments remain suitable for your client. If you're recommending changes, clearly explain why. If you're not making changes despite underperformance, document your reasoning.

Your suitability reports will be reviewed by the FCA if you're ever audited. Make sure you document that you've considered future scenarios: early retirement, death benefits, and pension transfer options. While these aren't pleasant topics, they're essential for your compliance documentation.

If you outsource investment management, and the client has supplementary fund literature available, the suitability report itself doesn’t need to be overly detailed, just clear and easy for them to understand.

7. Eliminate Discrepancies in Your Documentation

One of the most common issues that creates compliance problems is contradictions within your suitability reports. Your document should flow logically from start to finish with no conflicting statements. If your client has competing goals, document how you discussed and resolved these contradictions.

This error-checking process is time-consuming when done manually, but is another reason why suitability report software like Automwrite can significantly reduce your compliance risks. Automwrite's built in analysis detects conflicting details and inconsistencies, catching discrepancies before they become an issue.

8. Clearly Outline Next Steps for Your Clients

The final sections of your suitability document should wrap up your advice and clearly tell your client what happens next. What actions will you take? What do they need to do? What's the timeframe? Your clients rely on you for clarity, and leaving them uncertain about next steps undermines your professionalism and the value of your advice.

9. Personalisation - Your Answer to Compliant, Client-Friendly Reports

Generic templates and basic report writing tools produce generic reports that don't reflect your individual advice process or your client's specific situation, which is what the FCA is looking to eliminate. However, modern technology now gives you access to tools that make your reports more tailored while still reducing your workload.

Want to cut your report writing time without compromising on bespoke quality? See how Automwrite's suitability report software helps you create tailored and compliant reports in minutes, with built-in error checking and discrepancy resolution. Arrange a demo today to see how.

TL;DR - Key Takeaways for Busy IFAs

✅ Your suitability report should act like a summary of the annual financial plan check-up.
✅ It should be concise, easy to understand, and free from jargon.
✅ Personalisation is one of the most important aspects of the Suitability Report—where possible, clients should see their own words reflected in the documents.
✅ Risk levels should match the client’s profile.
✅ Discrepancies, errors, and inconsistencies should be avoided.
✅ Goals should follow the SMART (Specific, Measurable, Achievable, Realistic, Time-sensitive) framework.
✅ Investment choices should be transparent and easy to follow, as should the associated costs and performance.
✅ Future scenarios, such as retirement and inheritance, should be considered.
✅ The report should set out the next steps clearly, so clients know what to expect.

Automwrite can cut advice processing times and leave you with bespoke documents. Click here to arrange your demo today.