What is all the Fuss About Suitability?

Much has been written and spoken about on the topic of “suitability”, yet there are still a wide range of views on exactly what it is, why it is of interest, how it will affect financial advisors and, most important, how it will benefit consumers. Here is our perspective.

As a result, advisors are increasingly being asked to “prove” they have applied their knowledge, experience and professional judgment in making product recommendations that are in the best interests of their clients.

In some jurisdictions, notably the U.K. and Europe, regulators are already mandating that advisors use tools and methodologies, not only for initial recommendations, but also for ongoing supervision of the continued “suitability” of their recommendations.

Recently, Canada’s largest regulator, the Ontario Securities Commission (OSC) released a paper for industry comment that reflects a similar narrative around the subject of suitability, and how advisors are going to have to demonstrate the appropriateness of their investment advice. It is expected that the OSC’s recommendations will largely be accepted and eventually influence policy or regulation in other provinces across Canada.

Canada is just one example. Consequently, it is our overall belief that the issue of “suitability” will become increasingly important and of widespread interest among countries where financial planning and investment advisory industries are established or rapidly growing.

Power, Professionalize and Protect your Practice

The combination of FinaMetrica’s risk profiling application and PlanPlus’ financial planning software into a single product that can be accessed at various levels presents a unique offer to the market. To the best of our knowledge, there is no other fully integrated suite of software tools to address the issue of suitability that is so academically sound and validated through actual use by advisors.

I have been using FinaMetrica for over 17 years for onboarding new clients. They like the extensive value of the reports; but what we appreciate is the innovations in technology, the value of the client-facing materials and the development of the life-long client relationships as I get to really know their behavioral tendencies. FinaMetrica has assisted me in building a very successful practice and we highly recommend it for any advisor who wants to enhance the overall value of their client relationships.

Ron Wilkinson - Portland, Oregon, USA
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