Richard Cooper, Business Development and Accreditation Manager at LIBF, explains why paraplanners should make the most of the opportunity to draw a clear line between suitability reports and compliance documentation by responding to the FCA’s consultation on simplifying the rules on pension and investment advice.
There’s a quiet revolution happening in the world of suitability reports and, for once, it’s not being led by software vendors, compliance departments, or consultancy firms. It’s being led by the FCA.
Buried within the latest FCA consultation paper CP26/10 – Simplifying the Pensions & Investment Advice Rules is a remarkably candid admission: suitability reports have become bloated, overly defensive, and in many cases – ineffective at actually helping clients.
The regulator has listened to years of industry feedback, paraplanner frustration, and adviser complaints. Now it’s proposing something many of us have wanted for a long time: a reset.
This isn’t just regulatory housekeeping. It’s an opportunity to reshape one of the most central pieces of financial advice communication.
A call for proportionate, client‑focused reporting
The FCA’s message is unusually direct: suitability reports have become too long, too repetitive, and too focused on compliance rather than clarity.
It acknowledges that fear – fear of scrutiny, fear of complaints, fear of the dreaded file check — has pushed firms to create reports that protect the firm but don’t necessarily serve the client.
By explicitly stating that suitability reports should be concise, proportionate, and written with the consumer clearly in mind, the FCA is signalling that the era of “cover everything, just in case” may finally be coming to an end.
And the most important line in the paper? Suitability reports must not be used as compliance records.
For paraplanners, who have long advocated for a distinction between narrative explanation and evidential documentation, this is a rare moment of regulatory alignment with professional instinct.
A consolidation that simplifies rather than complicates
One of the more admirable aspects of the FCA’s proposal is its decision to move away from the MiFID vs. non‑MiFID distinctions that have confused firms and created unnecessary divergence in processes. Instead, the regulator intends to create a single, consolidated framework governing when and how suitability reports are required.
Under the proposed changes, a suitability report will be required whenever a firm advises on a financial instrument, when a recommendation is ‘not to act’, and when the client is not UK-resident. These are technically expansions of the existing rules, but in practice, they largely reflect what many firms already do for consistency’s sake.
The FCA knows this and makes no attempt to exaggerate the scale of change. This is evolution, not revolution. But it is evolution in the right direction.
A clearer vision for report content
Perhaps the most encouraging aspect for paraplanners is the regulator’s stance on content. The FCA wants reports to:
- focus on what the client needs to understand
- clearly explain the recommendation and its potential disadvantages
- avoid unnecessary duplication of risk warnings or disclosure language
- leave detailed evidence, assessments, and research notes in the file, not the report
No templates will be produced – and that’s deliberate. The FCA wants to avoid creating a new tick‑box culture and instead to empower firms to write in a way that genuinely supports customer understanding. This aligns seamlessly with the Consumer Duty’s higher standards for communication and clarity.
For an industry that often defaults to lengthy boilerplate, this is a welcome prod towards meaningful, personalised explanation.
Timing: bringing consistency
The FCA is proposing a single universal rule: suitability reports should always be provided before the transaction is concluded.
Most firms already operate this way, and paraplanners will be familiar with the rhythm of producing a report to accompany a Letter of Authority or client approval form. This change is about consistency, not disruption.
The only remaining exception – where distance communication makes pre‑transaction delivery impossible – is under review.
It is likely to be retained, but the FCA appears to be signalling that this is an edge case rather than a practice to routinely rely on.
The regulator is backing paraplanners
If these proposals are adopted, the role of the paraplanner may become even more central to the client communication journey.
This is a moment to elevate the craft of report writing: to use storytelling, clarity, and structure to genuinely support understanding rather than satisfy internal auditors.
It is also an opportunity to push back gently, but confidently, against the culture of defensive reporting.
The FCA’s direction of travel is clear: concision is not non‑compliant; clarity is not risky; proportionality is not inadequate.
Paraplanners have long believed this. Now the regulator is putting it into the rulebook.
A turning point – if the industry chooses to take it
There will, of course, be firms that cling to old habits. The gravitational pull of “we’ve always done it this way” can be strong, especially where risk management is concerned.
But the profession has a chance to step into a more mature phase of advice documentation – one where suitability reports become clearer, shorter, and more human.
The FCA has opened the door. It’s now up to paraplanners, advisers, and firms to walk through it.
Main image: Post it note, absolutvision-82TpEld0_e4-unsplash
