The Consumer Duty board report: describing activity is not evidence

The annual board report on retail customer outcomes is the shortest document in a firm's Consumer Duty file and the hardest one to write well. Most reports describe what the firm did. A board cannot make a decision from a description. Michael Fasosin sets out the difference between activity and evidence, a four column shape that forces the distinction, and the three metrics that carry the most weight in a small advice firm. The point is not a longer report. It is a shorter one that a new non executive could read cold and act on.

The annual board report on the outcomes being received by retail customers is the shortest document in a firm's Consumer Duty file. It is also the hardest one to write well, and the one most likely to be read by somebody who had nothing to do with producing it.

Most of the reports I see describe activity. The firm reviewed its charging structure. The firm refreshed its target market statements. The firm delivered training to advisers. All of that may be perfectly true, and none of it tells a board whether clients are receiving what the firm intended them to receive.

Activity and evidence answer different questions

Activity answers "what did we do". Evidence answers "what happened to clients, and how do we know". A board has to make a decision, and only the second question supports one.

Take price and value. An activity line reads: we reviewed our ongoing advice charge against the market and consider it competitive. Nothing in that sentence can be checked, and nothing in it tells a director whether any client is paying for something they did not get.

An evidence line reads: 40 clients sit in our lowest fee band; we tested whether each received the annual review the charge pays for; 11 had not had one in 18 months; those 11 are booked before 31 December and the cause was a review calendar that clustered anniversaries in March.

The second version is shorter. It is also considerably harder to write, because you have to go and find out.

A shape that forces the distinction

I keep coming back to four columns, because a table will not let you hide behind a verb.

What we measured	What we found	Against what	What we are doing
Reviews delivered to clients paying an ongoing charge	11 of 40 in the lowest band overdue by more than 12 months	Our own service commitment of one review a year	11 booked before 31 December; anniversaries levelled across the year
Clients in a model portfolio outside their agreed risk profile	6 of 212	The profile recorded at the last fact find	All 6 contacted; two profiles were genuinely out of date and were updated
Complaints and expressions of dissatisfaction	3, all about report turnaround	Prior year: 1	Report process re-timed; measured again at the half year

Three rows of that kind carry more weight than eight pages of narrative. Every row has a number, a comparison and a consequence. A director who was not in the room can read it and ask a sensible question.

The metrics that earn their place in a small firm

Most advice firms do not need twenty metrics. They need a handful that would actually change a decision.

The first is service delivered against service charged for. It is the one the FCA has been clearest about, it is the one clients notice, and in most firms it is the one that quietly slips.

The second is suitability drift: clients whose current holdings no longer match the profile on file. This is a reasonable proxy for whether the advice process is working as designed rather than as documented.

The third is the vulnerability register actually being used, rather than existing. A count of clients recorded as having a characteristic of vulnerability, next to a count of those where the recorded adjustment was made, is an uncomfortable comparison and a useful one.

Where firms lose credibility

Two habits do more damage than a thin report.

Choosing the metric after seeing the result is the first. If a measure is defined once the numbers are in, it will flatter the firm and everyone reading it will sense that.

Reporting only what looks good is the second. A board report with no adverse finding in it is not reassuring. It reads as a report that did not look. The 11 overdue reviews are the most useful thing in the example above, precisely because somebody went and counted.

The reading test

Before it goes to the board, give the report to somebody in the firm who was not involved in writing it and ask them one question: what would you do differently having read this.

If the answer is nothing, the report has described a year rather than evidenced one. Year two of Consumer Duty is the year that distinction starts to show.

Every Wealth Analytica article is fact-checked against primary sources where applicable. Read our editorial policy for our sourcing and review standards.