Recently our Director, Cathi, took part in an interview with Professional Paraplanner where she was asked her 3 top tips from a compliance perspective to help paraplanners – this is what she said…

1. Get your head around charges disclosure – as best as you can!

Mifid II has caused all manner of bother, with very complex requirements that, for the most part, simply can’t be met right now, due to lack of information from funds and providers. But this will change from April, with enhanced reporting required from them.

So it’s important to start with a clean sheet, understand what disclosure is needed, and how you will turn that into something clear and understandable for your clients. As ultimately, that’s all that matters. Don’t get bogged down in detail that doesn’t benefit the client!

2. Be clear on the difference between a client’s needs and objectives.

Objectives being what clients want to achieve (retire at age 60, pay off mortgage, for example) while their needs are often identified by the planner, being more quantifiable, and more essential (£1,500 net per month in retirement for example).

Sometimes needs and objectives work in harmony. But sometimes they are mutually exclusive, and the planner may have to work with the client to understand the importance of their needs.

As a paraplanner, knowing this distinction, and challenging a factfind that doesn’t provide sufficient detail to enable you to identify both objectives and needs, will mean a more robust file, clearer process and more suitable advice.

3. Familiarise yourself with COBS 9.4.

Before you fall asleep, hear me out! At the recent Professional Paraplanner Technical Insight Seminar I presented at, almost every single paraplanner was amazed that in the Conduct of Business Sourcebook, the FCA only ask for three things to be in the suitability report.. 3!

1. The client’s objectives

2. Why the advice meets those objectives

3. What the disadvantages are.

Everything else, in theory, will be on the file, or in supporting documentation, such as an illustration.

In reality, we all put more than this in, as you want a single document clearly explaining the advice to clients.

But being familiar with the actual FCA requirements can really help you assess how your firm is approaching reports, and whether any improvements can be made.

For more information on how our sister company, Apricity, do compliance – head over to their website. 

Top 3 compliance tips for paraplanners

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