Against a backdrop of regulatory reviews and numerous market jolts from coronavirus, the remainder of 2020 could be the perfect time to brush up your processes and approach to assessing capacity for loss with clients.
The FCA’s Assessing Suitability Review 1 centred on attitude to risk and accumulation but the second stage of the review, Assessing Suitability Review 2, is now firmly pointed towards retirement advice, which suggests it will focus in on capacity for loss this time around. The review has been pushed back to 2021 as a result of Covid-19, which allows advisers extra time to ensure that they’re processes and procedures are fully up to speed.
And speaking of the pandemic, the ongoing impact of Covid-19 may well have sparked significant changes to portfolio construction and sources of income for clients in retirement, which may in turn prompt another reason to reassess and take a fresh look at clients’ capacity for loss. And although it may be autumn already, this is arguably time to consider giving your approach a bit of a spring clean while you’re at it.