The annual review is still run as a valuation meeting, long after its purpose changed

Washington Irving published Rip Van Winkle in 1819. A villager wanders into the Catskill mountains, falls asleep and wakes twenty years later. He walks back into his village and, as he understands his duty, declares himself a loyal subject of the King, unaware that a revolution has come and gone while he slept. The ritual is perfectly intact. The authority it served no longer exists.

I think a good number of annual reviews in UK advice firms are running on the same basis. The shape is familiar to anyone who has sat in one. The platform statement comes out, performance takes most of the hour, and "has anything changed?" arrives near the end, usually to the answer no. The paraplanner then writes up something that shows Consumer Duty was considered.

That shape wasn't an accident. For a generation, the ongoing fee was broadly understood as payment for looking after the money, and the review was where the looking after was reported. Performance was the natural centrepiece because performance was, as client and adviser both understood it, the product. The meeting answered the question everyone assumed it was there to answer.

The question moved on 31 July 2023. Consumer Duty's price and value outcome, set out in PRIN 2A, asks a firm to show that the fee charged for ongoing service corresponds to a service actually delivered. The FCA's work on ongoing advice services has pushed in the same direction, and the regulator's view, as I read it, is that a valuation slide does not amount to a review. So the meeting now has to answer something different: did this client receive what they paid for this year, and can the firm show it?

Answering that changes the running order. The review opens with the fact-find on screen, working through circumstances line by line so that changes are noticed rather than waved through. Objectives are restated and reconfirmed, which is itself a fact worth recording. Attitude to risk and capacity for loss are revisited, with the capacity work redone wherever something material has moved, and the firm's vulnerability framework, built on the four drivers in FG21/1, is run through before anyone discusses returns.

The portfolio conversation still happens. What changes is what it is evidence of. The useful record is how the portfolio has behaved against the design intent of the CIP or CRP segment the client sits in: for an accumulator, whether growth has been broadly in keeping with what the segment was built to do, and for someone in drawdown, whether withdrawals still look sustainable given the returns actually realised. Fund-by-fund commentary is conversation, and the comparison with design intent is the part that belongs in the file.

The meeting then closes with the value point made explicit, the agreed actions and the trigger for the next review. The file note that follows should read cold. Someone who wasn't in the room should be able to see that the service was delivered, that the outcomes were considered and that the fee was earned.

Why is this harder than it sounds? It has little to do with knowledge. Most advisers could list every element above without prompting. The difficulty is habit, and habits formed over twenty or thirty years of valuation meetings feel like the natural order of things rather than a choice anyone made. A new agenda written down, shared with paraplanners and used as the skeleton of every file note does more than any amount of reminding.

It is also where a practice owner can see the firm's service clearly, perhaps for the first time. Reviews built on the same skeleton can be compared. Overdue reviews, missed vulnerability checks and objectives that haven't been restated in years become visible in the aggregate, and the investment committee gets segment-level evidence from the reviews rather than anecdote.

Rip Van Winkle's village forgave his toast and found him harmless enough. The valuation meeting has lasted on much the same indulgence, because nobody in the room is harmed by it on the day. The ritual survived. The question it answered did not.