A recommendation report (or suitability report) is a formal document provided by financial advisers to clients. It outlines investment recommendations and justifications based on the client’s personal circumstances.
Why is Option D Correct?
The FCA requires firms to consider a client’s existing investments, pensions, and insurance policies before making recommendations.
This ensures that clients are not sold duplicate or unsuitable products.
Reviewing previous arrangements helps advisers identify gaps in financial planning.
What Else Is Included in a Recommendation Report?
Investment objectives & risk tolerance.
Tax considerations.
Cost disclosures and fees.
Why Not Other Options?
A (Inflation rate) → While inflation is considered, it is not a mandatory section in suitability reports.
B (Interest rate) → Relevant for fixed income investments, but not always necessary.
C (Protection) → Only included if insurance products are being recommended.
???? Reference: FCA Conduct of Business Sourcebook (COBS 9 – Suitability Reports), CISI Wealth & Investment Management.
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