How to write reports
The layout of a suitability report should be clear, readable and use language that each particular client will understand. Therefore:
• Make sure all three of the mandatory requirements noted above are included in the report.
• Avoid long paragraphs. I suggest no more than one topic in a paragraph.
• Use bullet points to summarise the information.
• Be sure to avoid repetition throughout the report (which unnecessarily increases its length and makes it unpleasant to read).
• Do not include anything irrelevant to that client. Standardised or template wording is not a problem provided the report and its contents are personal and relevant to that client.
• Put all research, technical product details, fund information and ceding scheme information in clearly marked appendices at the back of the letter.
Summary
Ideally, the suitability letter will be two or three pages that can include all the relevant client directed information. The technical information about the products, the platform and the back performance of investment funds can all be in appendices to the report.
This is a shift away from the back-covering detailed reports that have been produced over the years to a much more client-friendly, readable, understandable report that the clients are likely to read and understand and value.
Tony Catt is a compliance consultant
Key points
Suitability reports are a means of informing the clients about the financial planning arrangements that are being made.
It is a balance between confirming a financial arrangement that has been made in a language a client can understand and producing a document that contains sufficient information.
Customers are less likely to consider the recommendations being made if the report is too long.
