‘Know your customer’ detail is compulsory but following the release of the DB Guidance Consultation paper these requirements have now been increased a notch (well possibly a bit more) it’s all in the detail of the case.

What used to be details of whether a client had children and if they were financially dependent is now – name, age, dependency, occupation and possibly some other important detail of their lives- this last part is the devil! This will definitely be case specific.  A sea change for what we need to ask and for what the client may expect to be asked!

This is a subtle but important step and we can definitely see where the regulator is going with this. 

In terms of DB advice, where objectives are for example around death benefits or legacy, there needs to be a real conversation regarding what the client is looking to achieve. These conversations must have context to the client’s beliefs, their circumstances and of those who they are looking to support (children!).

To justify an objective in the terms of the advice we are providing, detailed discussions are needed with the client. Analysis needs to show whether that objective is achievable or possibly just an aspiration. And this can only be done by having full detail on the client, in-depth detail.

The anomaly we are already seeing is that advice could be given on a £200,000 CETV to an incredibly high level of fact-finding, whereas a £500,000 pension switch would seemingly require a lower level.

Read into this – Good Practice in terms of the FCA paper GC 20/1, the should be expected standards when advising on DB transfers and going forward will be the expected standard for all forms of financial advice