Last week, TCC and Recordsure launched their ‘AI for compliance’ webinar series with a focused discussion on suitability reviews. Our second excerpt from the session explores how firms can move beyond simply ticking boxes to create a process that genuinely improves client outcomes, reduces rework and strengthens adviser performance.
The hidden costs of poor suitability checks
Part two of the webinar begins by considering a question that resonates across the industry: what is the hidden cost of poorly documented advice files? A live poll gauged attendee opinion and the results revealed that almost half of firms – 42% – needed to revisit between 10 and 20% of advice files after a suitability review. Nearly a third of firms fell into the 20–30% range, while 29% reported needing to rework fewer than 10% of files. Interestingly, no firms indicated that more than 30% of cases required rework.
These findings underscore a familiar reality: even when checks and balances are in place, many clients’ cases initially carry unclear ratings, leading to inefficiencies as advisers are taken away from more profitable activities, additional work and potential delays in evidencing that truly suitable advice has been delivered. For some firms, achieving a rework rate below 10% is almost unheard of, highlighting just how far industry standards can vary.
Meeting regulatory expectations
Central to the discussion was the FCA’s approach to risk-based sampling as detailed by TCC’s Technical Director, David Boyhan. David highlighted how this point was recently reinforced by Lucy Castledine, the Director of Consumer Investments at the FCA, during the PIMFA conference. It was outlined that the regulator expects firms to focus monitoring efforts on higher-risk interactions with clients. This includes both new product recommendations and ongoing advice, ensuring that suitability is assessed consistently across all client touchpoints.
In the webinar, a good practice benchmark of reviewing around 10% of files, with higher volumes applied to higher-risk areas was highlighted as good practice. The latter, relating to areas such as new advisers or complex products like drawdown and VCTs. Importantly, the results of file reviews should inform future sampling volumes: positive findings may allow for a reduction in reviews, but continuous monitoring over the short to medium term remains key to demonstrating suitable client outcomes.
A collaborative, end-to-end review process
Neil Dethick, TCC’s Operations Director went on to explain how a structured, collaborative suitability review process can make a tangible difference to wealth management firms. Neil went on to detail how each file that is rated unclear or unsuitable ought to be accompanied by a clear, actionable pathway to resolution. Those advisers and paraplanners who benefit from consultation with TCC are engaged directly in case clinics, workshops and training videos, ensuring insights are not just reported but acted upon.
Driving real change and measurable results
When firms integrate these insights into their operations, the impact can be profound. Over the past ten months, firms working with TCC have seen their “right first time” rates improve from the low 60s to nearly 90%. This dramatic turnaround demonstrates that feedback only becomes meaningful when it drives behavioural change, reinforcing that suitability reviews are most effective when they combine detailed analysis, clear guidance and actionable follow-up.
For a full exploration of these insights, including live poll discussions and detailed examples of the TCC review process, the webinar can be watched online or read in transcript form below.
Garry Evans: Before we move on to David, I want to gauge the audience’s reaction to the hidden costs of suitability checking done badly and the high levels of unclear ratings. I’m really keen to get a feel from the audience as to what proportion of your cases are unclear and require rework.
Poll two result
How often does your firm currently have to rework advice files following a suitability review?
More than 30% of cases need rework: 0%
Between 20% and 30% of cases need rework: 29%
Between 20% and 10% of cases need rework: 42%
Less than 10% of cases need rework 29%
We’re not sure: 0%
A lot of the clients we’ve worked with in the past would have gone into that top category of more than 30% of cases needing rework. Well, certainly certain cases sat having an initial unclear rating. There are some here with less than 10% cases needing rework, which is almost unheard of.
Moving over to David… David, with your FCA hat on, could you talk about what you think the FCA’s expectations are on risk-based sampling, how it should be done, what kind of sample percentage you typically result in, and what evidence the FCA are looking for to prove that customer outcomes truly are suitable?
David Boyhan: Yes, of course, Garry. And it’s actually pretty good timing because the FCA’s expectations around sampling were amplified this week by their director of consumer investments, Lucy Castledine. She gave a speech at the PIMFA conference, where she confirmed that outcomes monitoring is a focus area for the FCA over the next 12 months. So, what does the FCA expect? Well, as a risk-based regulator, the FCA expects firms to take a risk-based approach to monitoring. So, the key is to focus monitoring on higher-risk interactions with clients. That’s both where there’s a new product recommendation and also where no new products are recommended. And we’ll come back to that point later in the webinar.
It’s also crucial that both initial and ongoing advice files are reviewed in sampling models. Historically, models that focus on initial advice but with ongoing advice being a key part of business models, the FCA expectation is that these files need to be monitored for suitability as well. We believe having a business model where circa 10% of file reviews is generally seen as good practice. However, volumes should be increased for high-risk areas. High-risk areas include new advisers and products such as drawdown and VCTs. And volumes will be informed by the findings of file reviews, so, for example, where findings are positive, then volumes of reviews could be decreased. But the key is to monitor the outcomes over the short to medium term.
Garry Evans: Brilliant, thank you, David. So if I come back to you, Neil, with David’s viewpoint in mind. Could you please walk us through the TCC suitability review process and how that differs in terms of how you go about things and what that means in terms of outcomes for both clients and advisers? And of course, the first time-right rate.
Neil Dethick: Well, to start with and knowing that AI is a key theme of this webinar, what we’ll do to start with is what the AI can’t do.
So, in order to provide an end-to-end collaborative file review service, we’ll first seek to fully understand the nature of the business we’re working with. This will include detailed discussions with the firm’s compliance teams, an examination of the advice, policy and standards, and an understanding, basically, of the advice and the sales process.
But when it comes to the file reviews themselves, the first thing to point out is that whenever a file is rated unclear or unsuitable, we’re going to provide a concise 15-minute and detailed pathway to suitability for all those cases. We’ll also communicate directly with advisers and paraplanners via case clinics and provide bespoke best practice workshops based on the findings, and perhaps videos to help with adviser development. We’ll also include commentary on the evidence of the adherence of the four Consumer Duty outcomes in each file review, which builds to provide board-level MI on how the firm is delivering good client outcomes.
At a higher level, we’ll provide comprehensive monthly or quarterly reporting on the findings, the key themes, and the trends we note, and through our advisory team of subject matter experts, we can make recommendations for future process improvements. Now, if you pull all this together, it does allow for a significant step change to be made. And as the graphic in front of this shows now, this shows the aggregated right first-time percentages for the firms we worked with over the last ten months. And as we see, 30as it starts to build, you’ll note that suitability ratios have improved from the low 60s to almost 90% last month.
Garry Evans: Fab. Thanks, Neil. That’s an impressive turnaround and a great example of partnership, as the best feedback MI and intent in the world won’t make a difference if the recipient doesn’t actually use the information to drive behavioural change.
If you want to see how your firm can achieve similar improvements, now is the time to take action.
Watch the full webinar to explore the TCC suitability review process in detail, see how AI can support but not replace the human expertise required and discover practical ways to reduce rework while improving client outcomes.
Whether you’re looking to enhance adviser performance, strengthen compliance or turn suitability reviews into a genuine business advantage, TCC’s experts coupled with the power of Recordsure’s AI can help.