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Glossary
Glossary for financial advisers and mortgage brokers: 13 terms in plain English
Each definition is taken from one of our guides, which gives the rule in full and where it comes from. The terms are in alphabetical order.
Adviser capacity
The number of ongoing clients one adviser can serve. An adviser working 44 weeks of 37.5 hours with a quarter of the time on other work has 1,237.5 hours a year for existing clients, which at seven hours a client is 176 clients at most.
Source: Our own arithmetic, in tests/paraplanly/tools-check.txt
Cash flow planning licence
The subscription for cash flow modelling software, priced per adviser. On 1 October 2026 FE CashCalc listed an adviser licence at £80 a month plus VAT with a free paraplanner licence, and Voyant listed AdviserGo at £175 a month per adviser.
Source: FE CashCalc and Voyant UK pricing pages, read 1 October 2026
Consumer Duty board report
The report PRIN 2A.8.3 requires a firm to prepare for its governing body on the results of its outcomes monitoring and the actions required. The governing body reviews and approves it at least annually. The rule asks for a report, not a form.
Source: FCA Handbook, PRIN 2A.8.3 and 2A.8.4
Disengaged client
A client who ignores review invitations. The FCA sets no number of chasers and no cut-off. It lists as good practice having a policy to stop collecting fees where a client has not engaged with the service for a period of time.
Source: FCA, ongoing advice services review findings, February 2025
Letter of authority
The client's signed permission for an adviser to get information from a pension or investment provider. In our chase schedule the third chase falls at 20 working days, and from then the delay is raised as a complaint under the provider's own procedure.
Source: Our own schedule, in tests/paraplanly/tools-check.txt
Ongoing advice charge
The yearly fee a client pays for an ongoing service, usually a percentage of the portfolio. A client on 0.75% of £320,000 pays £2,400 a year. In our tracker a service year with no review delivered or declined on file is shown as undelivered, with the fee for that year beside it.
Source: Our own arithmetic, in tests/paraplanly/tools-check.txt
Ongoing advice review (FCA, 2025)
The FCA's review of whether firms delivered the annual reviews clients paid for. Reviews were delivered in 83% of promised cases, declined or not engaged with in 15% and not attempted in under 2%. The FCA asked firms to look back to 2018 and consider redress.
Source: FCA, ongoing advice services review findings, February 2025
Pensions and inheritance tax (April 2027)
From 6 April 2027 most unused pension funds and death benefits are included in the estate for inheritance tax. The government confirmed on 21 July 2025 that personal representatives, not pension scheme administrators, will report and pay the tax.
Source: Government consultation response, 21 July 2025
Periodic suitability assessment
The regular review of whether earlier recommendations still suit a client paying for ongoing advice. On 1 October 2026 COBS 9A.3.9R still requires it at least annually. CP26/10 proposes periodic reviews with no fixed interval, having considered and rejected an 18 or 24 month minimum.
Source: FCA Handbook, COBS 9A.3.9R; FCA CP26/10 (published 25 March 2026)
Reduction in yield
The yearly growth a portfolio loses to charges. On £250,000 with a 2% initial charge, 0.75% ongoing adviser charge, 0.60% platform and fund charges and 5% growth before charges, the reduction in yield is about 1.6% a year over ten years.
Source: Our own arithmetic, in tests/paraplanly/tools-check.txt
Relevant conversation record (SYSC 10A)
The record a firm keeps of a relevant face-to-face conversation with a client. It must include the date and time, location, attendees, who initiated the meeting and the details of any client order, and be kept for five years, or up to seven if the FCA asks.
Source: FCA Handbook, SYSC 10A.1.14R and 10A.1.16R
Retention period (suitability records)
The minimum time COBS 9.5.2R requires suitability records to be kept: indefinitely for a pension transfer, pension conversion, pension opt-out or FSAVC; five years for a life policy or a personal or stakeholder pension; three years in any other case.
Source: FCA Handbook, COBS 9.5.2R
Suitability report
The document that explains a personal recommendation to a retail client. COBS 9.4.7R sets three minimum contents: the client's demands and needs, why the firm concluded the recommendation is suitable on the client's information, and any possible disadvantages.
Source: FCA Handbook, COBS 9.4.7R
AEO Lookup editorial team
We write practical guides for people who run small UK firms, and we check every fact against its source on the date shown. Read how we review, or tell us if something has changed.