Another process that will be particularly important under the consumer duty, which puts an emphasis on the client services outcome, will be keeping track of client meetings and reviews.
Holman says that if there is no client meeting this does not negate the adviser's obligation to do a suitability assessment.
"Some firms think that if a client doesn't want a meeting you don't have to do a suitability assessment; you do. So you still have to have that communication and you have to base that suitability assessment on the last known details of that client," she says.
"What firms need to challenge themselves on is if the client is not engaging for three years or so, is that data three years out of date, can you honestly say that is the suitable portfolio for their objectives and their risk portfolio?
"If you haven't had any contact with the client, that means you need to either disengage or really hound that client."
The timing of the review meeting should also be set in stone, not done at the end of a piece of work or at any other random date, she says. "If it's in March, it's in March, even if there's work that follows through."
This is a particular issue in companies that have taken on legacy books but don't have the capacity to do proper reviews with the clients, and it is resulting in complaints coming through that are virtually impossible to defend successfully, Holman says.
She believes most problems in advice companies are caused by oversight or an honest mistake. But sometimes, and increasingly so, it can be due to lack of resources.
"Everybody's running around like headless chickens firefighting. To get staff is really hard, it's hard to get a financial planner, it's hard to get paraplanners, hard to get admin people, and with wages being demanded so high, that is really putting a strain on firms," she says.
"Sometimes resource is not an issue, and it wouldn't be acceptable to the FCA [as an excuse], but that's just the reality."
Evidencing value
A big part of the consumer duty that advice companies could find themselves struggling with is the price and value question, according to Holman.
The FCA is not advocating that cheap is value, "but it is forcing firms to properly look at what is their value, how much do they need to earn in order to deliver a good service and investment into the company and be sustainable", she says.
"That's your starting point then, and have fair remuneration for your directors, their qualifications and all the rest of it. It is in nobody's best interest if a firm is operating on so low income that something takes them over the edge and they go bust and they end up at the [Financial Services Compensation Scheme]."
