The Documents Part 5 – Needs Analysis (Safe Harbour Port 2)

The next element of the safe harbour steps requires you as an adviser to identify the subject matter of the advice sought by the client (whether explicitly or implicitly). This is relevant to determining the scope of the advice.

The subject matter of the advice could be:

1. a goal the client is seeking to achieve;
2. a strategy to achieve a goal;
3. advice on what to do following an event or situation (e.g. divorce, redundancy or receiving an inheritance).

Either you, as an adviser, or the client may suggest limiting or revising the subject matter of advice sought by the client. You will need to exercise judgement in deciding what the scope of the advice is and make sure that it is consistent with the client’s relevant circumstances and the subject matter of the advice. You can limit the scope of advice to a single issue if this is consistent with the subject matter of advice sought by the client.

Some of the factors that may be relevant in identifying what advice the client is seeking include:

1. what the client has told you;
2. why the client is seeking advice;
3. what the client wants to achieve;
4. how much the client is willing to pay for the advice.

If the subject matter is not clear, you should help your client or clarify with them what they are trying to achieve. You cannot exclude consideration of important issues based on what the client is willing to pay.

You cannot use the client’s willingness to pay to determine the scope of the advice sought in a way that is inconsistent with the client’s relevant circumstances.

In determining the subject matter of advice with the client, you must not engage in conduct that will (or is likely to) mislead or deceive — e.g. misleading the client to think that a revised subject matter is better for the client, even though it may not be.

Other articles in this series:

• The Documents Part 1 – Introduction
• The Documents Part 2 – Financial Services Guide (FSG)
• The Documents Part 3 – Needs Analysis (Introduction)
• The Documents Part 4 – Needs Analysis (Safe Harbour Port 1)

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