How does Genovo stack up against the PFS Suitability Report Writing Guide?
Nigel Ogram
At Genovo, we write regular blogs, covering users tips and new features and updates. Occasionally, something really interesting or important crops up (for example how Genovo can be used to help with Consumer Duty) and we’ll write an additional blog. This is one of those instances…
Over the years, there have been many articles written about what makes a good suitability report. I’ve never read one that wasn’t useful in some way, and some of them have been genuinely insightful. We wrote a series of blogs on how to make suitability reports reader-friendly and engaging way back in 2014 and since then, we’ve also built our own interactive best practice guide, which looked to summarise the key guidance that’s been issued over the years in one quick reference resource.
In May this year, I spotted articles in several of the usual financial services news channels that the Personal Finance Society had released their own suitability report writing guide, written by Alan Gow, Laura Royle and Philip Greenwood of the PFS Paraplanning Panel, together with Melissa Kidd of Motem Ltd.
I downloaded it and read it. Twice! I’m sure the authors of the guide wouldn’t mind me saying that it contains nothing earth-shattering, new or contentious. Much of the content is common sense. Some of it is blindingly obvious. However, it’s the first guide I’ve seen that pulls everything together in a single resource, presented in a logical sequence, in a visually engaging manner, and in a language that’s easy to read and understand. Do you spot a theme here? The guide is written in the same way that advisers should be writing to their clients…
If you haven’t already, you really should download and read the PFS suitability report writing guide.
Having been deeply impressed by the guide, we wanted to see how Genovo stacks up against it. The fact that we’re writing this blog indicates that we’re very happy with our findings…
This blog follows the same structure and order as the PFS suitability report writing guide, so it’s probably a good idea to read the two documents side-by-side.
Language and layout
| PFS Guide key takeaway |
|---|
| “Ensure that the information in the report flows logically from one section to the next. Each section should build upon the previous one, leading seamlessly to your conclusions and recommendations.” |
Language and tone
Genovo’s content has been written with the client in mind and has been heavily influenced by the requirements of the Client Understanding outcome of Consumer Duty. We’ve used language promoted by the excellent Plain English Campaign wherever possible.
Although Genovo contains elements of boilerplate content, the vast majority of it can be customised to reflect your own preferences using Report Content Manager, Report Section Manager and the Advice Options & Reasons Library. Genovo’s extensive customisation suite means you’ll always be writing to your clients in your preferred language and tone.
There are also numerous free-text boxes littered around Genovo which encourage the user to add personalised, client-specific content to a report, including replaying of the client’s own words, which the PFS guide recommends.
Layout tips
Genovo uses clear headings and sub-headings. We enable the use of colours and styles extensively through ‘report themes’ functionality.
Formatting tips
Genovo uses clear, sans-serif fonts, short sentences and paragraphs, bullet points and left-alignment for ease of reading (although you can customise all of this if required).
Structure
A Genovo report is very carefully and logically structured, with a beginning, a middle and an end. There’s a title page, a table of contents, an executive summary, an introduction section, review sections, recommendation sections, an important information section and several (optional) appendixes.
Content
| PFS Guide key takeaway |
|---|
| “Use bullet points, bold text, or other methods to highlight critical information. This makes important data stand out and ensures it is not overlooked.” |
Executive Summary
The main Genovo report type provides an executive summary. This isn’t just a repeat of content from the body of the report, but a genuine summary of the salient points. The executive summary is usually around a page long.
Introduction
The Genovo Introduction section ‘sets the scene’ for the rest of the report content. You can customise almost all of the boilerplate content and add client-specific / scenario-specific content ‘on the fly’ as you build your report.
Objectives
Although Genovo has many standard (customisable) options for recording objectives, it also provides the ability to add very personalised objectives, by adding your own options, or even including ‘freestyle’ text content, which can include custom images, charts and tables if required.
Risk Profile
Genovo has a dedicated Client Risk Profile section in every report, covering attitude to risk (with ATR profile content from 18 risk profilers, plus the ability to add custom profiles), capacity for loss, knowledge and experience and investment preferences.
Recommendations, reasons why and disadvantages
| PFS Guide key takeaway |
|---|
| “These are core FCA requirements for a suitability report. Any recommended actions need to be clearly detailed for the client, along with the reasons why they’re being made and the potential disadvantages.” |
Recommendations
Genovo is a multi-product, multi section, modular report builder that allows you to deal with multiple advice scenarios and recommendations in one report covering reviews and new product recommendations. It covers almost 100 product types across pension, investments, protection, mortgages, equity release and long-term care. Recommendations for existing plans are expressed in clear, concise terms – e.g. “I have recommended you retain, top up and rebalance the existing portfolio of the Transact Stocks and Shares ISA 9755787…”.
Genovo reports aren’t entirely product focussed. There are additional steps to allow non-product-related recommendations, such as trusts, estate planning, LPA and general insurance. As always, there’s the ability for users to add their own custom recommendations too.
Recommendations for new plans are shown in a table format for ease of reading.
Reason why
Recommendations have dedicated steps that cover rationale for the product type, the provider, the contribution, and any withdrawal / income. For mortgage recommendations, there are steps to cover the repayment method, amount, term, interest rate, product and lender.
Potential disadvantages
As per the PFS guide we consider a risk warning to be different to disadvantage.
New plan recommendations and any recommended actions for existing plans all have their own dedicated, optional Key Disadvantages step. Genovo provides an extensive range of context-sensitive disadvantages for each recommendation. They are all fully customisable and you can even add your own if required. In the downloaded report, disadvantages are shown in a highlighted panel to make them stand out, with clear text and bullet points.
Risks
| PFS Guide key takeaway |
|---|
| “Risks should again be specific to the recommendation and the client. If you are using a template, ensure that anything that’s not relevant is taken out.” |
Genovo separates disadvantages and risks. Scenario-specific disadvantages are covered in the review and recommendation sections in the main body of the report, very close to the recommendation.
Risk warnings have a dedicated section where context-sensitive risk warnings, specific to the recommendations being made, are automatically inserted.
Investment strategy
| PFS Guide key takeaway |
|---|
| “Take care not to get too technical or try to teach the client about investing at this stage. You should focus on what the strategy achieves for the client rather than the details of asset allocation and underlying securities.” |
Investment strategies in Genovo come in two forms:
- 1) a current investment strategy – for an existing plan
- 2) a recommended investment strategy – for an existing plan or a new plan recommendation
Genovo has a standalone section for the recommended investment strategy. As well as containing details of the underlying investments (which can be populated from Genovo’s Investment Library), there is the facility to include supporting content, such as justification for the strategy, images and graphs, plus additional information such as an explanation of the company’s Centralised Investment Proposition, or commentary on sustainable investment.
Charges
| PFS Guide key takeaway |
|---|
| “We would recommend always putting the charges clearly and prominently in the report.” |
In line with MiFID II requirements and aligning perfectly with the PFS guide, Genovo presents ex-ante charges for all plans in a clear table, expressed in percentage and automatically-calculated monetary terms, with an aggregated figure at the bottom.
When a recommendation is being made for an existing plan which could result in a change to the charges, Genovo also provides a Revised Plan Charges step, which gives the client a clear ‘before and after’ disclosure to help them easily see and understand the difference in charges after any recommendation has been made.
Replacement business
| PFS Guide key takeaway |
|---|
| “Any additional cost needs to be justified in terms of the benefit the client gets for this extra cost.” |
Charges Comparison
Genovo provides a clear disclosure of charges for the existing plan and the recommended alternative in the form of the plan charges table for each plan. In addition, there’s a simple but effective ‘difference in charges’ statement, expressed in percentage and monetary terms to remove any possible ambiguity.
Furthermore, there’s also a Reduction in Yield step. This has been designed to complement the charges comparison step and allows you to go a little deeper with your charges comparison and compare on a like-for-like basis all the charges of the existing and recommended alternative plans, including any initial charges associated with the recommended new plan.
Performance comparison
Genovo also provides a Performance Comparison step for replacement business and revised investment strategies. This is presented in a table format with clear ‘before and after’ section and allows performance to be shown against benchmarks over 1, 3 and 5 years.
Risk comparison
Genovo’s investment strategy functionality includes the ability to record the risk rating of any current or recommended investment strategies, so that the client can quickly and easily see any differences. There’s also a Why Investment Strategy step for any recommended investment strategies which provides customisable content for the user to explain how the investment strategy meets the clients’ objectives, attitude to risk and capacity for loss.
Product features comparison
Genovo’s review sections provide functionality to record a plan’s features and benefits, along with a free-type text box to add additional information. Recommendation sections include an identical step so that clients can easily see what features they have gained or lost following a recommendation.
Alternatives considered
Genovo provides functionality to quickly and easily explain why Stakeholder and workplace schemes were considered but discounted. Although not required by the regulator (but often required by compliance departments…), all new recommendation sections also include an optional Other Solutions step where users can explain why other products or solutions were considered and why they were discounted.
Appendices
| PFS Guide key takeaway |
|---|
| “Use signposting in the report e.g. ‘see point 6 in appendix’ if you want to direct people to additional information.” |
Genovo firmly believes in signposting to external content, rather than replicating it in the report and needlessly bulking it out. All Genovo reports have an optional Supporting Information step to list any attachments and enclosures.
Conclusion
As you can probably tell, we’re rather pleased that Genovo delivers pretty much everything that the excellent PFS suitability report writing guide suggests you should be doing with your suitability reports.
If you’re already using Genovo, then you can be confident that as long as you take care over the personalised element of your reports, Genovo will take care of the content, language, layout and presentation.
If you’re not already using Genovo for your suitability reports and you want to see whether it’s as good as we say it is, then why not sign up for a 30-day free trial and start treating your clients to a more reader-friendly and engaging suitability report – I’m sure they’ll thank you for it!
Written by Nigel Ogram
Nigel has worked in financial services in one form or another for over 35 years. After a few years as an adviser, he started his paraplanning career in 1997 and quickly found an affinity for building and establishing systems and processes designed to drive efficiencies. While paraplanning, Nigel also developed and marketed an Excel-based factfind / needs analysis system, which opened up a new path working with financial services software. This continued with roles at Synaptic Systems, where in addition to being the in-house subject-matter expert on the core applications, Nigel developed a passion for helping advisers and their teams integrate software effectively and profitably within their businesses. Outside of work, Nigel is a confirmed “petrolhead” with a strong interest in motorsport, which he often combines with his second hobby – photography, which he shares with his two sons.
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