Financial Advice Suitability Report Uk

Financial Adviser Prompt Template

You are a Chartered Financial Planner and Fellow of the Personal Finance Society (FPFS), authorised and regulated by the Financial Conduct Authority (FCA). You hold the Chartered Insurance Institute's Level 6 Diploma in Regulated Financial Planning and specialise in holistic wealth management for UK clients.

Client Profile

Personal Details:

  • Age: 45 years old
  • Gender: Male
  • Marital Status: Married
  • Spouse's Age: 43 years old
  • Dependants: Two children (ages 12 and 9)
  • Employment: Senior manager in technology sector
  • Spouse Employment: Part-time teacher

Financial Position:

Income:

  • Client gross annual salary: £85,000
  • Spouse gross annual salary: £28,000
  • Rental income from buy-to-let property: £12,000 per annum (net after expenses: £8,500)

Assets:

  • Primary residence: £650,000 (owned jointly, £180,000 outstanding mortgage)
  • Buy-to-let property: £295,000 (£140,000 outstanding mortgage)
  • Workplace pension (client): £185,000
  • Workplace pension (spouse): £42,000
  • ISAs (combined): £68,000
  • General Investment Account: £35,000
  • Premium Bonds: £20,000
  • Emergency fund (easy access savings): £15,000
  • Cash in current accounts: £8,000

Liabilities:

  • Primary residence mortgage: £180,000 (2.8% fixed until 2027, 18 years remaining)
  • Buy-to-let mortgage: £140,000 (4.1% fixed until 2026, 16 years remaining)
  • Car finance: £12,000 (£350 per month, 3 years remaining)

Monthly Expenditure:

  • Mortgage (primary): £950
  • Mortgage (buy-to-let): £890 (covered by rental income)
  • Council tax: £220
  • Utilities and broadband: £280
  • Groceries and household: £650
  • Car finance: £350
  • Petrol and transport: £320
  • Childcare and activities: £450
  • Life insurance and critical illness cover: £85
  • Home and contents insurance: £95
  • Discretionary spending and entertainment: £800
  • Total monthly expenditure: approximately £5,090

Current Financial Arrangements:

  • Contributing 8% of salary to workplace pension (with 5% employer contribution)
  • Spouse contributing 5% of salary to workplace pension (with 3% employer contribution)
  • £250 per month into Junior ISAs for children (£125 each)
  • Level term life insurance: £400,000 sum assured (expires age 65)
  • Critical illness cover: £200,000 (expires age 65)
  • No income protection insurance
  • No lasting power of attorney in place
  • Wills last updated 8 years ago

Objectives and Concerns:

  1. Retire comfortably at age 60 (15 years' time)
  2. Ensure university funding for both children (approximately £50,000 needed in 6-7 years)
  3. Concerned about inheritance tax liability
  4. Wondering whether to retain or sell the buy-to-let property
  5. Uncertain about investment risk appetite
  6. Would like to help children with house deposits eventually
  7. Concerned about adequacy of protection arrangements

Attitude to Risk:

  • Previously completed risk questionnaire suggesting balanced (5/10) risk profile
  • Uncomfortable with significant short-term volatility
  • Values capital preservation but recognises need for growth
  • No previous experience with investment losses exceeding 10%

Your Task

You will produce a comprehensive Suitability Report covering the following areas:

  1. Executive Summary - Key recommendations at a glance

  2. Current Position Analysis - Assessment of existing arrangements, identifying gaps and inefficiencies

  3. Retirement Planning Strategy - Projections, required contributions, pension consolidation opportunities, and tax-efficient withdrawal strategies

  4. Investment Portfolio Review - Asset allocation recommendations across ISAs, pensions, and general investment accounts aligned with risk profile and time horizons

  5. Education Planning - Strategies to fund university costs whilst maintaining retirement objectives

  6. Property Portfolio Assessment - Analysis of buy-to-let retention versus disposal, considering tax implications and capital redeployment

  7. Estate Planning - Inheritance tax mitigation strategies, including gifting allowances, trust arrangements, and Will review recommendations

  8. Protection Review - Assessment of life insurance, critical illness, and income protection adequacy with recommendations

  9. Tax Efficiency Review - Opportunities to minimise income tax, capital gains tax, and utilise allowances

  10. Cash Flow Modelling - Projected financial position under various scenarios

  11. Implementation Roadmap - Prioritised action plan with timescales

  12. Ongoing Service - Recommendations for regular reviews and monitoring

Ensure all recommendations comply with FCA regulations, clearly explain associated risks, and are suitable for the client's circumstances and objectives. Use realistic growth assumptions (e.g., 5% nominal returns for balanced portfolios) and current tax year allowances.

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