The file has to show the reasoning, not just the result

Most firms make good decisions and keep bad records of why. Those are different failures and only one of them is visible in an examination.

The gap

Ask an adviser why a client holds what they hold and you get a clear, thoughtful answer.

Ask where that reasoning is recorded and the answer is frequently nowhere. It exists, it is correct, and it lives in one person's head.

What the file needs

What was known about the client. What was recommended. Why the second follows from the first.

That third element is the one that goes missing, and it is the one suitability actually turns on.

Discretion raises the bar

With discretionary authority, the client did not approve each decision. That makes the documented reasoning the only evidence the decision was appropriate.

The reasoning existed. It just was not written down, which for these purposes is the same as not existing.

Advertising substantiation

Under the Marketing Rule a firm must have a reasonable basis for every claim in its advertising, and be able to show it.

The support must exist before publication rather than be assembled when questioned. This is the practical reason to avoid superlatives.

Electronic communications

Business conducted by text or a messaging app is still business and still has to be captured. Enforcement in this area has been substantial and it is not a technicality.

The annual review

The compliance programme must be reviewed annually and the review must be documented. A programme that exists as a binder nobody has opened is a finding in itself.

The practical habit

Write the reason at the time, in one or two sentences, in the system of record. It takes seconds and it is the difference between a firm that did the right thing and a firm that can show it did.