Suitability reviews are often seen as a routine part of compliance - a box to tick during new business processes. Yet it’s the quieter, overlooked cases that can pose the biggest risks: annual reviews where nothing changes.
The reality of no change reviews
During our recent webinar, we polled a small number of the attendees on how often they formally undertake a suitability assessment as part of a client’s annual review.
How often do you undertake a formal suitability assessment of the advice provided at the annual review (even if the advice is that there should be no change)?
- More than 10% of annual reviews are subject to a suitability check: 20%
- 0-10% of annual reviews are subject to a suitability check: 80%
- No annual reviews are suitability checked: 0%
It was good to see that the firms in our survey all understood the importance of reviewing the ongoing advice.
Why they matter
David Boyhan, TCC’s Technical Director, put it succinctly: no change reviews should never be ignored. From a risk perspective these files can actually be high risk, especially if a client hasn’t changed their position in a number of years. The lack of new product recommendations is often why they are overlooked, yet ongoing suitability still needs verification.
The checks are simple in theory:
- confirm that a meaningful annual review occurred
- check that client objectives and needs are still aligned with advice
- clarify that their attitude to risk and capacity for loss remain appropriate.
But in practice, ensuring this consistently across large client bases can be challenging.
How risk profiles shape review frequency
Not all products carry the same level of risk. For instance, drawdown accounts typically require more frequent scrutiny than ISAs. Likewise, clients who haven’t engaged for more than 12 months but are still paying fees need their files reviewed to ensure they are truly benefiting from the services provided. It’s these nuances that elevate no change reviews from routine paperwork to a vital compliance checkpoint.
Leveraging AI to make it work
Neil Dethick, TCC’s Operations Director, shared how in his managed services team, AI is transforming the way no-change reviews are conducted. Rather than replacing human judgment, AI removes the labour-intensive tasks. It flags cases where attention is needed, checks for evidence of meaningful annual reviews and helps the reviewer to RAG (red, amber, green) rate files based on timeliness, documentation and client outcomes.
The result is faster, more accurate assessments coupled with a clearer picture of where processes are working well and where improvement is needed. Advisers get targeted feedback without the combative back-and-forth that often accompanies traditional compliance checks.
From compliance burden to collaborative insight
When executed effectively, suitability reviews (whether for new business or ongoing advice cases, including no-change reviews) can provide invaluable insights. By delivering thorough, evidence-based feedback, compliance teams and advisers can work collaboratively. Patterns and trends become easier to identify enabling firms to encourage positive behavioural change without adding extra costs.
As the FCA continues to emphasise its “show me don’t tell me” approach, you must be able to evidence good outcomes and a reasonable sampling process. Without this, FCA censure is a real risk.
For wealth managers, no change review clients represent a significant proportion of the population, often exceeding new business clients. Ignoring them increases both compliance risk and workload down the line. As such, they should be treated as higher risk and incorporated into business assurance models.
Bringing it to life
To help firms navigate this challenge, we’re offering a free consultancy review for ongoing services cases. The first five requests will receive a sample assessment of 100 client files, providing a clear understanding of current compliance standards and actionable insights for improvement.
It’s a practical step toward transforming no-change reviews from a compliance obligation into a strategic advantage. Find out more here.
Don’t miss our next webinar
Don’t miss this opportunity to enhance your understanding and practices. Join our upcoming webinar ‘Show me don’t tell me compliance’, to delve deeper into the nuances of suitability reviews, explore the latest FCA guidance and learn how to navigate compliance challenges effectively.
