Suitability reports are a crucial part of the financial advice process, but let’s face it—most clients probably aren’t that excited about reading them. So, how do you strike the perfect balance between compliance and making these reports client-friendly? It’s about more than just the technical content; the look and feel of the report play a big role in whether clients engage with it or not.
To get a better understanding, we’ve gathered insights from three industry experts: Caroline Stuart, Chartered Member of CISI and Accredited Paraplanner from Sparrow Paraplanning; Melony Holman, Managing Director of Compliance & Training Solutions (CATS); and Damian Davies, Managing Director of The Timebank. They share their thoughts on making suitability reports more digestible, engaging, and ultimately more useful for clients.
In the last article of our three-part series on suitability reports, we look at how to strike the right balance between client engagement and packing in the important stuff.
Are visuals important? You bet.
Let’s start with visuals. In today’s world, where people are used to consuming information quickly and easily, the use of visuals in a suitability report can be a game-changer. Clients are more likely to engage with charts, graphs, and infographics than with dense blocks of text. But how important are they, and where should they be placed?
According to Caroline Stuart, visuals are essential for explaining complicated concepts clearly. “They can help explain complex ideas really simply,” she says. “Plus, they break up the text, making the report more inviting. After all, a picture says a thousand words, and that’s especially true when you’re dealing with a report that already has way too many!”
Melony Holman echoes this sentiment, stressing that visuals also make the report more engaging for clients. “Absolutely, visuals attract the eye and keep clients interested,” she says. “It really depends on the report, but I like to drop them in wherever they help explain something complex in simpler terms.”
Damian Davies takes a broader view, noting the historical significance of using visuals in communication. “We actually have the advertising industry of America in 1911 to thank for the cliché ‘a picture paints a thousand words,’ but it’s true,” he explains. “Back when The Timebank started, we used visuals like traffic lights to show clients whether their plans were working or not. Recently, we’ve used them to explain ‘value’ in advice fees.” He adds that cashflow reports are another great example of visuals helping to make complicated data more digestible—as long as they don’t get too academic.
In short, visuals don’t just add to the aesthetic appeal of a report; they can significantly enhance understanding and engagement. Strategic placement of these visuals—whether it’s a graph to explain investment performance or an infographic illustrating cash flow—can help clients make sense of their financial plans more easily.
How long is too long (or too short)?
The length of a suitability report is another area where opinions can differ. Too long, and you risk overwhelming the client with information; too short, and you may leave out crucial details. So, how do you find the right balance?
Caroline Stuart believes that a report should be as long as it needs to be, but the focus should always be on clarity and ease of reading. “A report will be as long as it needs to be,” she explains. “I’d rather give a client a 10-page report with plenty of white space, visuals, and clear font than a squashed 5-page one with tiny text and no graphics. It’s about clarity and client understanding, not the number of pages.”
Melony has encountered reports that stretch to 50 pages, which she finds excessive. “They were packed with compliance, but I doubt the client read them all,” she admits. “If there’s a lot of information, break it down into chunks. A one-page report won’t cut it, but 50 pages is probably overkill.”
Damian, as always, cuts straight to the point: “Size doesn’t matter. It’s about proving that the advice is suitable for the client. No amount of extra caveats will save you if you can’t demonstrate suitability.” His advice for firms is simple: create a library of generic guides to cover educational content rather than cramming everything into the report itself.
Ultimately, the length of a suitability report should be determined by how well it communicates the necessary information. The key is to ensure the content is clear, focused, and specific to the client. If that means a longer report, so be it—but don’t add unnecessary content just to hit a page count.
Is the suitability report a sales tool?
One of the most interesting debates around suitability reports is whether they should be seen as a sales tool in addition to their regulatory function. Should the report actively help ‘sell’ the client on the recommendations made, or is it purely an informational document?
Caroline takes a firm stance on this issue, saying she doesn’t see the suitability report as a sales tool. “As a paraplanner, no, I don’t see them as a sales tool,” she says. “By the time the report is ready, the client is usually already on board with the adviser’s recommendations. The report is more of a final step to put everything in writing, not something to ‘sell’ the client on a product.”
Damian, however, argues that the line between sales and compliance has blurred in recent years. “Since MiFID, the entire industry is regulated based on transactions,” he explains. “The report has to be a sales tool because it explains why the sale is suitable. But that doesn’t mean it can’t be compliant and client-friendly at the same time.”
His key takeaway? “Avoid using the report as a get-out-of-jail-free card. If you can’t prove the advice is suitable, the report won’t save you.”
So, while the suitability report’s primary function is to document recommendations and ensure compliance, it can also help reinforce the value of the adviser’s services. It’s a fine line, but when done right, the report can serve both purposes without sacrificing clarity or compliance.
Making reports client-friendly
At the end of the day, the main goal of a suitability report is to ensure the client understands the advice being given and how it aligns with their financial goals. That means the report should be easy to read, visually engaging, and specific to the client’s situation.
Caroline sums it up nicely: “It’s not about making the report look impressive; it’s about making sure the client understands it.”
And as Melony points out, breaking down complex information into smaller, more manageable sections can make a world of difference. “The last thing you want is for the client to feel overwhelmed or confused,” she says.
Damian emphasises the importance of balancing compliance with engagement. “Compliance doesn’t have to mean boring or impenetrable for the client,” he says. “At the end of the day, the client’s understanding of the advice is what really matters.”
Bringing it all together
Creating an effective suitability report is about more than just meeting regulatory requirements—it’s about communicating clearly with the client. Visuals can help break down complex concepts, while the length should be guided by clarity rather than arbitrary page counts.
The best suitability reports are those that put the client first, ensuring they understand the advice they’re receiving and how it will help them achieve their financial goals. After all, a report that’s clear, engaging, and client-friendly is far more likely to inspire confidence—and, ultimately, action.
