Purpose
The IAAT is designed to help personal investment firms understand how the FCA assesses the suitability of investment advice (excluding retirement income and DB transfers). It provides transparency on the FCA’s methodology during file reviews.
Who It’s For
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Personal investment firms
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Compliance and legal consultants
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Professional indemnity insurers
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Trustees and sponsoring employers of DC pension schemes
Key Points
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The IAAT should be used to assess advice given after 3 January 2018.
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It helps firms evaluate suitability of advice and adequacy of disclosure to clients.
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The tool is voluntary, and there are no qualification requirements to use it.
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Firms can use it for internal reviews, complaint responses, or past business reviews.
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The IAAT includes an instruction guide for interpretation and application.
File Review Guidelines
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Firms must ensure documentation is sufficiently detailed for third-party assessors to understand and assess suitability without needing original files.
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A Material Information Gap (missing key data) means advice must be classed as unsuitable.
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For clients with over five existing plans, additional IAATs must be completed.
Consumer Duty
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The IAAT is not used to assess compliance with the Consumer Duty before 31 July 2023.
FCA Review Standards
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FCA assessors (or third parties acting for them) must hold Level 4 advisory qualifications and have appropriate experience when using the IAAT for formal reviews.
Access and Use
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Usage is subject to a licensing agreement, which must be accepted before accessing the tool.
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Firms are encouraged to contact the FCA with queries regarding the IAAT’s use.
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