How to write a suitability report — a structured approach for UK IFAs (2026)

You're a paraplanner at a four-RI firm. Wednesday morning. The adviser dropped a fact-find into your shared folder yesterday afternoon with a note that reads, simply: "Standard pension consolidation. Balanced ATR. Move to the firm's MPS. Suitability please by Friday." You open the fact-find. You open last quarter's suitability report on a similar client and look at it. You wonder, for the third time this month, whether the structure you've been using is actually a structure or just a habit.

What follows is a structure. Not a template — the brief from compliance consultants and from the FCA's own work is consistent that templates encourage cut-and-paste and undermine the per-client reasoning the rules require. A structure is the shape the per-client thinking takes.

What the rules ask for

COBS 9.4 is the floor. The rule requires the firm to provide a suitability report, in durable medium, that specifies the client's demands and needs, explains why the firm has concluded that the recommended transaction is suitable, and explains any disadvantages. PROD 4 then adds the product-governance overlay — the recommendation has to be appropriate for the target market of the product.

Consumer Duty (PS22/9) raises the bar. The four outcomes — products and services, price and value, consumer understanding, consumer support — all bear on the suitability report. The consumer-understanding outcome is the one that bites hardest on report drafting: the firm has to evidence that the report communicates clearly enough that the client can act on it. A report that's technically complete but practically incomprehensible doesn't meet the duty.

The ten-section structure

1. Scope of advice

One short paragraph at the top of the report. State what the advice covers and — importantly — what it doesn't. "This advice covers the consolidation of the three personal pensions listed below. It does not cover your defined-benefit pension scheme, your ISA portfolio, or the estate-planning questions you raised at the meeting on [date]; those are covered in a separate piece of work scheduled for [date]." The exclusion clause matters. It anchors the report against the temptation to scope creep and protects the firm from claims that "but you should have advised on X."

2. Client circumstances

Pull the relevant material from the fact-find. Personal (age, family, employment), financial (income, expenditure, assets, liabilities, existing pensions), tax (marginal rate, available allowances, lifetime allowance position where still relevant). Cross-reference the fact-find rather than restating it; the suitability report is not the fact-find, and a 12-page restatement of fact-find data is a sign the report isn't doing its actual job.

3. Objectives and priorities

The objectives the advice addresses. State them in the client's words where possible, with priority order if they conflict. "Your primary objective is to retire at 62 with a sustainable income of £42,000 a year in today's money. Your secondary objective is to leave some inheritance to your children, though you've been clear this is subordinate to your own income." Vague objectives ("plan for retirement") produce vague suitability — the FCA's concern with this section is precisely that under-specified objectives let the recommendation justify anything.

4. Attitude to risk

The risk-profiler score, the score's narrative description, and the discussion that confirmed the score reflects the client's actual view. Where the discussion led to an adjustment — "the risk-profiler scored you as 6, but in conversation you expressed material discomfort with the volatility figures the score implies, and we have proceeded on the basis of 5" — record both the score and the reasoning for the adjustment. Don't bury the adjustment in a footnote; the FCA wants to see that the conversation happened.

5. Capacity for loss

The mistake that produces compliance pushback faster than any other is conflating capacity for loss with attitude to risk. They are different.

Attitude to risk is what the client emotionally and rationally would prefer in terms of investment volatility. Capacity for loss is what the client could withstand financially without material harm to their lifestyle or plans. A client can be high-ATR with low capacity (young, low savings, high ATR but everything they have is the deposit for a house). A client can be low-ATR with high capacity (older HNW client with a defined-benefit floor and substantial cash reserves, but who personally hates volatility).

The capacity-for-loss section needs to set out the client's financial position, the specific stress test you've considered (e.g. "a 25% drawdown in the portfolio reduces the projected retirement income from £42,000 to £37,500 in real terms, which remains above the £32,000 floor we identified as your minimum acceptable retirement income"), and the conclusion. A capacity-for-loss section that doesn't include a worked stress test is rarely defensible.

6. The recommendation

State the recommendation up front, in plain language, before any reasoning. The client should be able to read the first two sentences of this section and know what you're recommending. Then the detail: product, provider, contribution levels, withdrawals, fund choice, platform, wrapper. Numbers, not adjectives.

7. The reasoning

The reasoning section connects the recommendation to the client circumstances, objectives, ATR and capacity for loss already established. The structural test for this section is: does the reasoning explain why this client should hold this solution, or does it explain why the firm's CIP recommends this solution for clients in this segment?

The second framing is the shoehorning pattern the FCA has been visibly concerned about. The reasoning needs to land on the individual: "we have recommended the [firm's CIP solution X for balanced accumulators] because your retirement timeline of nine years, your capacity for loss as set out above, and your stated objective of inflation-protected income on retirement together fit the design intent of this solution. The alternative we considered — [solution Y] — was rejected because [client-specific reason]."

8. Costs, charges and alternatives considered

Costs and charges per MiFID II / COBS 6.1ZA disclosure rules. All-in cost expressed in cash and percentage terms over the recommended horizon. The reductions-in-yield disclosure where applicable. The alternatives considered need to be real alternatives — at least one credible alternative to the recommendation, with the reasoning for rejection. "Do nothing" should always be one of the alternatives considered for any recommendation that involves switching products.

9. Disadvantages and risks

What the client is giving up by accepting the recommendation. For a pension consolidation: any loss of guaranteed annuity rates on the ceding scheme, any loss of protected tax-free cash, any loss of with-profits or other guarantees, any exit penalties. For a switch to a new platform: the transfer risk (out-of-market exposure during transfer), the platform-failure risk, the recovery process. For any investment recommendation: the volatility, the maximum drawdown the strategy has historically produced, the period over which the client should expect to see negative returns.

This section is where Consumer Duty's consumer-understanding outcome bites hardest. The disadvantages should be set out in language the client can read. The test is whether a non-technical reader could finish this section and accurately summarise what they're accepting.

10. Ongoing service and review

The ongoing service the client is signing up for. The cost (separately disclosed). The cadence of review — annual is the minimum for most circumstances; six-monthly is the supervisory expectation for early-drawdown clients and for vulnerable clients. What triggers an interim review (life event, market event, regulatory change). What the client can expect from the firm between reviews.

The ongoing-service description matters because Consumer Duty has tightened the bar for what "ongoing" actually means. A firm taking an ongoing fee with no documented service for it is now a fair-value problem, not a paperwork problem.

The common compliance rejection reasons

From compliance consultants we work with, the recurring reasons reports come back for rework:

• ATR and capacity for loss conflated.The two are different concepts; treat them separately with their own evidence base.
• Objectives stated too vaguely."Plan for retirement" is not an objective; "retire at 62 with £42k of sustainable real income" is.
• Reasoning that's about the CIP, not the client.The shoehorning pattern. Reasoning needs to land on the individual.
• "Standard pension consolidation" wording with no per-client analysis.Cut-and-paste boilerplate. The wording almost guarantees compliance pushback now.
• No real alternatives considered."Do nothing" rejected in one sentence isn't an alternatives analysis.
• Costs disclosed in percentage only, with no cash equivalent.The all-in cash cost over the horizon is the figure the client can actually act on.
• Disadvantages section that reads like product literature.Generic risk warnings rather than client-specific consequences.
• Ongoing service described as "annual review" with no further detail.Insufficient under Consumer Duty's fair-value lens.
• Vulnerability indicators present in the fact-find but no evidence of adjusted communication.The duty's support outcome requires the report itself to demonstrate the adjustment.

Length, tone and readability

Length is not a quality signal. A 30-page report that nobody reads is less useful than a 10-page report the client actually engages with. The duty's consumer-understanding outcome pushes the industry's drafting style toward shorter reports with cleaner section breaks. Anchor the reading age at 16 — that's the FCA's preferred guideline.

Tone matters. The report is a record of advice but it's also a document the client will refer back to. Write it for the client, not for the file. The compliance reviewer reading it after the fact is a secondary audience, not the primary one.

How the workflow infrastructure helps

Most of the mistakes above are workflow mistakes, not knowledge mistakes. They happen because the fact-find data lives in one system, the risk-profiler output in another, the recommendation in a third, and the suitability report in Word. The act of transcribing data introduces errors, undercuts traceability, and creates the conditions for boilerplate copy-paste.

An end-to-end pipeline that holds the fact-find, the segmentation, the recommendation and the suitability narrative in one place doesn't write the report for you — that's still the adviser's responsibility. It removes the transcription overhead and surfaces the per-client data that the reasoning has to be grounded in. Wealth Analyticais built around this — the suitability work draws from the same source-of-truth client record the recommendation drew from.