Advice firm admin: 30 questions on ongoing reviews, suitability reports, Consumer Duty, pension IHT and AI, answered

Question 1

What did the FCA's ongoing advice review find?

Accepted Answer

Published on 24 February 2025, it found that suitability reviews promised to clients were delivered in 83% of cases; in 15% the client declined or did not engage; and in under 2% the firm made no effort. The FCA asked firms to look back to 2018 and to consider redress, which may be partial where some service was delivered.

Question 2

Does a firm have to refund ongoing advice fees if a review was not delivered?

Accepted Answer

The FCA expects the firm to consider it, case by case, and says redress may cover only part of the charges where some service was delivered. One undelivered year at 0.75% on a £320,000 portfolio is £2,400 before interest. The decision is the firm's, with its compliance function, on the evidence in the file.

Question 3

Is the annual suitability review being replaced?

Accepted Answer

Proposed, not yet. The FCA's consultation CP26/10, published on 25 March 2026, proposes that suitability be assessed on a periodic basis instead of at least annually, and clarifies that firms may charge for ongoing related services. Until a policy statement changes the rule, a review is due at least every twelve months.

Question 4

What must a suitability report contain?

Accepted Answer

As a minimum, three things: the client's demands and needs, why the firm concluded the recommendation is suitable having regard to the information the client gave, and any possible disadvantages of the transaction for the client. A document missing any of the three is not a suitability report under the rule.

Question 5

When must a suitability report be given to the client?

Accepted Answer

It depends on the product. For a life policy, before the contract is concluded. For a pension scheme, within 14 days of the contract. For a pension transfer or conversion, in good time before the transaction is effected. Otherwise, when the recommendation is made or as soon as possible after the transaction.

Question 6

What does the Consumer Duty annual board report have to cover?

Accepted Answer

The results of the firm's monitoring of customer outcomes and the actions required as a result. The governing body reviews and approves it at least annually, confirms whether it is satisfied the firm is complying with the Duty, and checks the firm's strategy is consistent with it. The FCA's review of the first reports criticised process descriptions without data or actions.

Question 7

Who pays inheritance tax on unused pension funds from April 2027?

Accepted Answer

The personal representatives of the estate, not the pension scheme administrator. From 6 April 2027 most unused pension funds and death benefits count in the estate. Personal representatives can instruct the scheme to withhold 50% of the benefit for up to 15 months, or to pay the tax to HMRC directly. Death-in-service benefits from registered schemes are out of scope.

Question 8

How should an adviser show charges to a client?

Accepted Answer

In pounds as well as percent, aggregated, with the cumulative effect on the return, before the service starts and at least yearly after. On £250,000 with a 2% initial charge, 0.75% ongoing, 0.60% platform and fund charges and 5% growth, the adviser receives £27,721 over ten years and the portfolio ends about £58,900 lower than with no charges.

Question 9

How long should an adviser wait before chasing a letter of authority?

Accepted Answer

Ten working days for the first chase, fifteen for the second, and at twenty working days the third chase should be framed as a complaint under the provider's own complaints procedure, with the adviser told. A letter of authority sent on 10 September 2026 reaches twenty working days on 8 October.

Question 10

Can a financial adviser use ChatGPT or Claude with client data?

Accepted Answer

Not on a personal or consumer account. The FCA has no AI-specific rules; the Consumer Duty, SM&CR accountability and the suitability rules apply. A firm needs a business account whose terms exclude training on its data, a processor contract, a named senior manager, human review of anything client-facing, a check on outputs and an exit plan. The adviser remains responsible for every recommendation.

Question 11

How much does Intelliflo or Plannr cost?

Accepted Answer

Plannr publishes £140 a month plus VAT per employee, with free external licences for outsourced paraplanners and compliance: £10,080 a year plus VAT for six people. Intelliflo Intelligent Office is quote-only; third parties report £130 to £135 per user per month, not confirmed by the vendor. Curo and Iress Xplan publish no price.

Question 12

Can AI do paraplanning?

Accepted Answer

It can draft: reports on the firm's template, review packs, file checks and chases. In an August 2026 survey of 178 advisers, 80% were comfortable with AI collating review and suitability packs but 43% with AI on pension transfers. The adviser decides what is suitable and signs. Overlyft can set up an AI assistant that prepares, checks and chases, and never advises.

Question 13

How much does AdvisoryAI cost per month for a suitability report writer?

Accepted Answer

On 1 October 2026 AdvisoryAI's own pricing page gave its suitability report tool at £299 per user per month on monthly billing, or £269 plus VAT per user per month on annual billing. Meeting notes and compliance checks were £99 each, or £89 plus VAT on annual billing. One report seat on monthly billing is £3,588 a year. Saturn and Aveni published no price.

Question 14

How many times does a financial adviser have to chase a client who ignores annual review invitations before stopping the fee?

Accepted Answer

The FCA sets no number and no cut-off. Its 24 February 2025 review looks for reasonable and proportionate attempts to engage and lists policies to stop collecting fees from clients who have not engaged as good practice. In CP26/10, which is not in force, it considered and rejected a rule to offboard clients after 24 months. The firm's own written policy sets the period.

Question 15

How long does a financial adviser have to keep client files under FCA rules?

Accepted Answer

COBS 9.5.2R sets the minimum for suitability records: indefinitely for a pension transfer, pension conversion, pension opt-out or FSAVC; five years for a life policy or a personal, stakeholder or defined contribution occupational pension; three years in any other case. Mortgage advice records are three years under MCOB 4.7A.25R. Complaints can reach the ombudsman after six years, so many firms keep files longer.

Question 16

Will CP26/10 let advice firms move every client to a review every 18 or 24 months?

Accepted Answer

No. CP26/10, published on 25 March 2026, proposes periodic reviews with no fixed interval. The FCA considered an 18 or 24 month minimum and rejected it, so the firm would set a frequency for each client and justify it. The proposal is not in force: on 1 October 2026 COBS 9A.3.9R still required a review at least annually.

Question 17

How much do FE CashCalc and Voyant AdviserGo cost for a small advice firm?

Accepted Answer

On 1 October 2026 FE CashCalc's page priced an adviser licence at £80 a month plus VAT with a free paraplanner licence. Voyant's UK page priced AdviserGo at £175 a month per adviser and £100 a month per auxiliary user. For two advisers and one paraplanner that is £1,920 a year plus VAT against £5,400 a year.

Question 18

Do I have to tell a client before recording a meeting with an AI note taker, and how long must the record be kept?

Accepted Answer

Yes. Where SYSC 10A applies, clients must be told before any service is provided that conversations will be recorded. SYSC 10A.1.14R requires the record to be given to the client on request and kept for five years, or up to seven where the FCA asks. The adviser has to check an AI-drafted note before it goes on file.

Question 19

How much does it cost to become a directly authorised mortgage broker with the FCA?

Accepted Answer

The FCA's application fee for most mortgage brokers is Category 4, which is £2,820 in 2026/27, paid once and not refundable. After that the firm pays an annual fee with a minimum of £2,200. A firm authorised in October pays about half the annual fee for its first part-year: the FCA's calculator gave £1,100, so £3,920 to the FCA before levies.

Question 20

What does a mortgage broker earning £180,000 from mortgages and £60,000 from protection pay the FCA a year?

Accepted Answer

On 1 October 2026 the FCA's fee calculator, on 2026/27 final rates, gave £3,526.29 for the year. That is an FCA fee of £3,027.00 (the £2,200 minimum, £733.62 on mortgage income over £100,000 and a £93.38 prudential fee), £195 for the ombudsman levy, £22.32 for the guidance levy and £281.97 for the FSCS. It is about 1.5% of the firm's income.

Question 21

How long does a financial adviser or mortgage broker have to respond to a complaint?

Accepted Answer

Eight weeks. DISP 1.6.2R requires a final response by the end of eight weeks after the firm receives the complaint. If the complaint is resolved by close of business on the third business day after it arrives, a shorter summary resolution communication is enough. After a final response the client has six months to go to the Financial Ombudsman Service.

Question 22

When do the FCA complaints return dates change, and when is the first new return due?

Accepted Answer

Every firm's complaints reporting period ends on 31 December 2026 under DISP 1.10.4BR. From 1 January 2027 all firms report for 1 January to 30 June and 1 July to 31 December on one new return, due within 30 business days. In England and Wales the return to 31 December 2026 is due on 12 February 2027 and the first new return on 11 August 2027.

Question 23

What does a note of a face-to-face client meeting have to include under SYSC 10A?

Accepted Answer

SYSC 10A.1.16R says the record of a relevant face-to-face conversation must include the date and time of the meeting, its location, who attended, who initiated it, and the details of any client order: price, volume, type of order and when it will be transmitted or executed. An AI-drafted note needs checking for each of these before it goes on file.

Question 24

When should an advice firm send the invitation, the reminder and the final letter before a client's annual review is due?

Accepted Answer

The FCA sets no timetable. One workable sequence is three contacts over eight weeks: an email invitation eight weeks before the due date, a phone call and reminder email two weeks later, and a posted final offer three weeks after that, with a reply-by date two weeks on. For a review due on 1 December 2026 that is 6 October, 20 October, 10 November and 24 November.

Question 25

How much is the FSCS levy for a small financial advice firm in 2026/27?

Accepted Answer

On the FCA's fee calculator, read on 1 October 2026, a directly authorised firm with £450,000 of investment advice income pays an FSCS levy of £2,710.29 for 2026/27 out of a total bill of £6,052.05. The class levy is about £5.93 per £1,000 of income and has no threshold, so a firm earning £90,000 pays £563.68.

Question 26

How long does the FCA take to approve a senior manager application?

Accepted Answer

By law the FCA has three months from the day it receives the application (FSMA section 61), and the clock pauses while it waits for information it has asked for. It now aims for two months. In January to March 2026 it closed 1,334 applications; the median took 19 calendar days and 98.1% met the two-month target.

Question 27

How long can someone cover for a senior manager who leaves unexpectedly, without FCA approval?

Accepted Answer

For up to 12 weeks in a 12-month period, if the absence is temporary or reasonably unforeseen (SUP 10C.3A.6R). Since 24 April 2026 the cover continues until the FCA decides, provided the firm makes a valid and complete application within the 12 weeks. Form C is due no later than ten business days after the manager ceases the function.

Question 28

How much do ChatGPT Business, Claude Team and Microsoft 365 Copilot cost per user in the UK?

Accepted Answer

On 1 October 2026 the vendors' own pages showed ChatGPT Business at £15 a seat a month billed annually or £18 monthly, with VAT not mentioned; Claude Team at £18 or £22.50, including 20% VAT; and the Microsoft 365 Copilot Business add-on at £13.80 a user a month paid yearly, before VAT. Four seats for a year come to £720, £864 and £662.40.

Question 29

Do ChatGPT, Claude and Copilot train on a firm's data on their business plans?

Accepted Answer

Each vendor's own terms, read on 1 October 2026, say not by default. OpenAI does not train on business data unless the firm opts in. Anthropic's commercial terms say it may not train models on customer content. Microsoft says prompts, responses and data reached through Microsoft Graph are not used to train foundation models. Personal ChatGPT plans show training as on, with an opt-out.

Question 30

What should an advice firm put in order in a client file before a compliance file check?

Accepted Answer

Our client file checklist walks the file in the order a reviewer reads it: 24 steps in five stages, from the fact find to the retention period. Three of the steps are the COBS 9.4.7R minimum, and a report missing any one of them is not a suitability report. The shortest period on the list is the 14 days after the contract for a pension suitability report (COBS 9.4.4R).