How to read a suitability report (before you sign anything)

01What it is, and when you must get one

When an FCA-authorised adviser makes you a personal recommendation — buy this fund, transfer this pension, take income this way — the firm's rules (FCA handbook, COBS 9) require a written suitability report: why this recommendation, for this person, given these circumstances. You should normally have it before anything is executed. It goes by different names — suitability letter, advice report, recommendation report — but if you've been advised and haven't seen one, ask. This guide pairs with our check-an-adviser toolkit, which covers vetting the adviser before you ever reach this document.

02The anatomy of a good one

• Your objectives — what you said you wanted, in your terms, with timescales.
• Your circumstances — income, assets, debts, dependants, health where relevant. This is the factual foundation everything rests on.
• Risk — twice. Your attitude to risk (how much volatility you can stomach) and your capacity for loss (how much you can afford to lose without changing your life). They are different questions; good reports treat them separately.
• The recommendation and — crucially — why it's suitable for you, not a product brochure.
• Costs in pounds: initial and ongoing adviser fees, platform and fund charges, and their combined drag.
• Risks and disadvantages of the recommendation, stated plainly.
• Alternatives considered and why they were rejected — including "do nothing".
• The ongoing service: what the annual fee buys and how often you'll be reviewed.

03The ten-point reading checklist

1. Objectives: are they recognisably yours, or boilerplate ("achieve capital growth over the medium term") that could describe anyone?
2. Facts: is every figure about you correct? An error here can quietly invalidate the whole analysis — and it's the easiest thing to fix before signing.
3. Risk match: does the risk level match what you actually said — and does the recommended portfolio match the stated risk level?
4. Capacity for loss: addressed as its own question, with reference to your actual finances?
5. Costs in pounds: can you find the total first-year cost and annual ongoing cost in £, not just percentages? Run the long-term drag through our fee impact calculator and sanity-check the numbers against the fee benchmark.
6. Why this, specifically: is there a reason this product/platform/fund suits you, beyond generic praise?
7. Disadvantages: does it candidly say what's worse about the recommendation, or only what's better?
8. What you give up: on any transfer or switch — exit penalties, guarantees, protected tax-free cash, death benefits. This is where the expensive, irreversible mistakes live (see pension consolidation).
9. Ongoing fee vs ongoing service: is the annual percentage attached to a concrete service you'd miss if it stopped?
10. The read-aloud test: is there any sentence you couldn't explain to a friend? That sentence is your next question.

04Red flags

• Objectives in language you'd never use; circumstances copied incorrectly from the fact-find.
• A cautious risk conversation followed by an adventurous portfolio (or vice versa).
• Fees only ever expressed as percentages; no combined total; charges scattered across appendices.
• No alternatives section, or "do nothing" never considered.
• "As we discussed" doing the work that written reasons should do.
• Pressure to sign before you've had time to read it — a legitimate recommendation survives a week's reflection.

05Questions to ask before signing

Four that earn their keep: "What's the total cost in pounds in year one, and every year after?" · "What would you recommend if I did nothing?" · "What am I giving up by moving?" · "Which parts of this recommendation are you paid more for than the alternatives?" A good adviser answers all four comfortably — the answers may even be in the report already, which tells you it's a good one.

06Common questions