Why A Detailed Fact Find Questionnaire Is Needed

Published / Last Updated on 18/08/2020

When you appoint us a your financial adviser, there is a usually a detailed fact find questionnaire required.  Many clients ask why is it so detailed and how secure is my information and will you use this data to try and sell me more?

We are happy when clients question the need to completed such a detailed form.  If more people took such an interest in their data protection then there would be much less financial fraud.

As advisers, we have to comply with many different sets of rules and laws both inside and outside regulated financial services.  There is the FCA Conduct of Business Sourcebooks *rule books) under the Financial Services and Markets Act but also General Data Protection Regulations (GDPR), anti-money laundering and terrorist financing under the Joint Money Laundering Steering Group.  There are also rules under KYC (know your client), ethical, social responsible and governance attitudes (ESG) and PROD, the Product Intervention and Product Governance sourcebook to ensure that products are understood and categorised or not as suitable for different types of client.

A. Fact Find

We need a questionnaire completing as we have a duty of care to know about you, your financial position, your risk, your health etc.  This is not because we are being nosey or collecting non-relevant information but we may need to know about your financial position, which type of account you have in the bank, interest rates, what your income is, what your family health, bloodline, hereditary illnesses, attitude to risk, investment experience, financial knowledge etc.  We need to know this as we must ‘know your client’ KYC.  .  In addition, we need to talk about your financial resilience and tolerance towards market volatility and investment losses.  This is not simply sign a form, we send our advice and our fee is paid.  If we do not know enough about you, your views and your objectives, then if we get the advice wrong then we may not give you the right advice and after all advice decisions affect not just yours but your family’s financial position for the rest of your life.

B. Identity Documentation

Holding details of passports, driving licence, HMRC data etc.  We are required by law to verify your identity.  We must verify who you are and sources of funds etc for anti-money laundering purposes.

On data retention, we must keep records of the same.  In many cases and certain types of advice, the FCA requires us under the Financial Services and Markets Act (FSMA) to keep information for 6 years and for others we must keep it permanently – i.e. forever.  In the case of say pension transfer advice, the advice affects the rest of your life so we must keep the same information forever.  That is the law under FSMA and conduct of business rules from the FCA rulebook.

We do not keep paper copies, we only keep electronic copies.  All sensitive ‘paper’ is either retained or if not needed then shredded using cross cut shredders with the paper ‘mulch’ then burned.  For electronic data, we are required under the Data Protection Act to protect all client data and have procedures for the same in terms of security access, back ups, encryption, firewalls and virus protection (we have 3 different levels – via our internet service provider and the router, then via our server another layer of firewall and which also only operates bank level security for encoded transmissions using secure socket layer (SSL) technology and then individual pcs and laptops have their own firewalls/virus protection etc.  We also pay professional security experts to try and hack our systems as another level to try and find any holes.

C. Trusting Us With Your Data: Honesty and Sincerity

We only know how to do the job correctly in a secure and practical way.  We would be shut down and prosecuted if we did not.   We are FCA authorised, which means we work with what is said to be the toughest financial regulator in the world.  We have completed their stringent personal security checks, police checks, HMRC checks (as we do tax returns etc) and more for them to be satisfied that we are ‘fit and proper’ to be allowed to work with and deal with client financial and personal information and the £millions of client wealth that have some access to. 

D. Data Used to Sell More

We need personal information to offer you personalised advice.  If you think we are another online social media group or shop service that tracks your very movements and online dealings with algorithms to ‘tailor’ their services then please think again.  We are a professional firm that has always offered fees and never been commission chasers or pushy salespeople trying to ‘upsell’.  We do not hound people, we do not spam people, we do not cold call, we do not send hundreds of text messages.

You have to feel safe about your finances and the people that you are trusting to advise and work with you – if you do not, then you should not use them.  Indeed, if you are not completely satisfied and feel safe with us and our firm then we genuinely do not want you or any other person that may feel the same as a client.  We do not want any client that deep down does not really trust us as you future financial wellbeing is too important to get wrong.

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