How ongoing suitability review costs are plaguing advice firms

Advice firms are finding it increasingly difficult to offer ongoing reviews to their lower-value clients without incurring losses.

Wealth Wizards conducted research among medium to large-sized advice firms, which revealed that these firms serve an average of 2,000-3,000 customers with assets ranging from £25,000 to £50,000. As ongoing clients, these customers require an annual review to evaluate whether the original advice provided is still appropriate.

Usually, the fee for ongoing review is less than £500 per annum. However, conducting an annual review for these clients requires manual efforts, and 95% of it involves admin, a paraplanner and an adviser, taking about 5-6 hours in total. On average, this process costs firms approximately £850-£900 per customer.

As roughly 50% or more of these lower-value clients opt for an annual review, businesses could be losing millions of pounds every year on this process alone.


Between 40% to 70% of reviews conducted by firms reveal no change in the customer’s circumstances, which means that little or no adjustments to the previously given advice are required.

In cases where no change is required, Wealth Wizards analysed the current processes used by advice firms and found that 46% of the input needed for the ongoing suitability process could be eliminated. 

By implementing digital processes, the remaining 100% of the process could be automated, resulting in significant cost savings for businesses. Additionally, this approach ensures that customers receive the right level of service, which is fully compliant with the incoming Consumer Duty rules.


Mark Kiddell, Chief Commercial Officer, Wealth Wizards, says: “It’s evident from our research that offering an annual review to lower value customers with no changes in their circumstances is incurring significant costs for businesses, amounting to millions of pounds. It’s not surprising to hear that firms are exploring ways to handle their obligations under the Consumer Duty regulations and considering strategies to manage their lower-value clients.

“However, it’s important to remember that these clients are also valuable, and they deserve the right level of service. That’s why we believe that implementing digital processes for the “no change” cases could save businesses millions while ensuring that these clients receive compliant and appropriate service. It’s crucial to strike a balance between serving this segment of the customer base and efficiently managing costs.

“As the advice market consolidates, medium to large firms understand that serving lower-value customers profitably is crucial for the future of the industry. These customers are potential HNW clients of the future and represent a valuable revenue stream for businesses.


“Advice firms can efficiently serve this segment by adopting a digitally-led journey for clients, such as the Wealth Wizards digital service, to conduct the review process and identify additional revenue opportunities. By doing so, businesses can significantly reduce the costs and time required to deliver the review, making it possible to serve these customers compliantly and profitably now, as well as creating considerable opportunities for the future.”

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