Study guide
7.4 Recommendations, Conclusions and Insistent Clients
CeMAP Module 1 Financial Services, Regulation and Ethics
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1 Introduction
1.1 About the CeMAP Module 1 (FSRE) Exam 1.2 How to Use This Study Guide
2 UK Financial Services Industry and the Wider Economy
2.1 Purpose and Role of Money and Financial Markets 2.2 Structure of UK and International Financial Markets 2.3 Types of Main Markets and Market Participants 2.4 Asset Classes and Their Characteristics 2.5 The UK Government, EU Influence and International Standards 2.6 Bank of England, Financial Institutions and Financial Crime
3 Serving the Retail Consumer
3.1 Consumer Perceptions and Firm Obligations 3.2 Consumer Financial Needs and How They Are Met 3.3 Product Types and Their Functions
4 Legal Concepts for Financial Advice
4.1 Legal Entities and Powers of Attorney 4.2 Law of Contract and Agency 4.3 Property Ownership, Insolvency and Bankruptcy 4.4 Wills and Intestacy 4.5 Trusts: Structure, Purpose and Types
5 Development of UK Financial Services Regulation
5.1 History of UK Regulation 1986–2021 5.2 The UK Regulatory Framework and Other Regulators 5.3 Additional Oversight: Senior Management, Auditors, Trustees and External Compliance
6 The FCA and PRA and Their Handbook
6.1 FCA and PRA: Statutory and Operational Objectives 6.2 Principles-Based Regulation, Duties and Enforcement Powers 6.3 Purpose and Structure of the FCA Handbook 6.4 High-Level Standards and the Training and Competence (T&C) Regime 6.5 Prudential Standards, CASS and the SMCR 6.6 Conduct of Business (COBS) Rules 6.7 Regulatory Processes, Regulated Activities and Authorisation
7 Advising Clients: Skills and Process
7.1 Communication Skills for Advisers 7.2 Gathering Information and the Fact-Find 7.3 Assessment, Analysis and Identifying Appropriate Solutions 7.4 Recommendations, Conclusions and Insistent Clients
8 Principles for Businesses and Conduct Rules
8.1 Principles for Businesses and Conduct of Business Rules 8.2 Preventing Harm, the Market Conduct Code (MAR) and Conduct Risk 8.3 Corporate Culture, Leadership and Senior Management Responsibilities 8.4 Consumer Rights and Unfair Contract Terms
9 Regulatory Framework Rules and Consumer Protection
9.1 Record Keeping, Reporting and Notification Requirements 9.2 Anti-Money Laundering and Proceeds of Crime 9.3 Data Protection and Data Security 9.4 Complaint Handling and the Financial Ombudsman Service 9.5 FSCS, Treating Customers Fairly and Conduct Risk
10 The Regulatory Advice Framework
10.1 Client Relationships, Adviser Responsibilities and Types of Clients 10.2 Fiduciary Relationships and Types of Service Provision 10.3 Disclosure Requirements and Adviser Charging 10.4 Limitations to Authority, Cancellation Rights and Vulnerable Clients 10.5 Regulated Advice Standards and Due Diligence on Products 10.6 Monitoring and Reviewing Client Circumstances
11 Ethics and Professional Behaviour
11.1 Core Ethical Theories, Principles and Values 11.2 Impact of Ethical Principles and Professional Codes of Conduct 11.3 The Code of Ethics and Resolving Ethical Dilemmas 11.4 Business Ethics, Whistleblowing and Ethical Culture 11.5 Professionalism, CPD and Ethical vs Compliance-Driven Behaviour
7.4 Recommendations, Conclusions and Insistent Clients
Key Takeaways Explain This Topic AI
A personal recommendation must be presented in a suitability report that explains why it is suitable, the client's demands and needs, and any disadvantages
The key features document must be provided so the client understands the product before committing
An insistent client is one who, having received a personal recommendation, requires the firm to facilitate a different transaction against the adviser's advice
COBS 9A guidance requires the firm to document the original recommendation, the risks of the client's chosen course, and obtain a written acknowledgement — distinct from execution-only
Execution-only is a separate service where no personal recommendation is given; insistent-client procedures do not apply
Last updated: September 2026
After analysis, the adviser presents a personal recommendation to the client. COBS 9.4 sets out what must be in the suitability report, the FCA's insistent-client guidance and COBS 9A.5A set out what happens when the client wants something different, and execution-only is a separate route that does not engage the suitability rules at all.
Structure of a Recommendation
A well-structured recommendation tells the client:
What is being recommended (the product, provider and amount).
Why it is suitable (matched to objectives, risk profile and circumstances).
How it works (key features, charges, term, risks).
What alternatives were considered and why they were not recommended.
What the disadvantages are.
What happens next (implementation, ongoing service, cancellation rights).
The recommendation should be in plain English , in the client's own words where objectives are restated, and free of jargon. Generic statements such as "this meets your attitude to risk" are not acceptable — the report must explain how it meets the ATR and CFL.
The Suitability Statement
Under COBS 9.4.7R , the suitability report (sometimes called the suitability statement) must specify:
The client's demands and needs .
Why the firm has concluded that the recommendation is suitable for the client.
Any possible disadvantages for the client of the recommendation.
For a pension transfer, conversion or opt-out, additional content is required (see COBS 19.1), and the report must be issued before the transaction is carried out.
The Consumer Duty adds an outcomes focus : the report should not merely describe the recommendation but enable the client to understand and act on it. Where the Consumer Duty applies, a technically complete but incomprehensible report may fail its consumer-understanding outcome. TCF guidance similarly illustrates why clear explanation matters; Principle 6 does not separately apply to that same in-scope activity.
Key Features Document
nThe key features document is a product-level disclosure required under COBS 5 (for non-MiID investments) and equivalent rules for pensions and life policies. It must be provided in good time before the client commits and must include:
The product's purpose and how it works.
The main benefits and risks.
The charges (initial and ongoing) and how they are taken.
Cancellation and cooling-off rights.
Tax treatment assumptions.
Performance scenarios or projections where required.
The adviser must confirm the client has received and understood the key features document; relying on the client to read it later is not enough.
Reasons Why Not
Where the adviser recommends one solution, the report should explain — in plain English — why other reasonable alternatives were not recommended. This is the "reasons why not" content. It helps the client understand the trade-off they are making and is good evidence that the adviser considered the client's circumstances rather than defaulting to a preferred product.
The Insistent Client
An insistent client is defined in COBS 9A.5A as a client who:
Has received a personal recommendation from the firm.
Decides to enter into a transaction different from that recommended.
Wants the firm to facilitate that transaction.
The FCA Handbook has no specific rule forcing an adviser to act for an insistent client. A firm may decline. However, where it agrees to facilitate the client's chosen transaction, COBS 9A.5A guidance sets out how to comply with the underlying obligations under the Principles, the client's best interests rule (COBS 2.1.1R), the fair, clear and not misleading rule (COBS 4.2.1R), the suitability rules (COBS 9/9A) and record-keeping rules.
Three Key Steps for an Insistent Client
The FCA's published guidance identifies three steps:
Step 1 — Follow the normal advice rules first
The adviser must still:
Carry out a full fact-find (COBS 9.2).
Ascertain the client's actual investment objectives (a request for a particular solution is not an objective).
Make a personal recommendation that is suitable.
Provide a suitability report.
The advice process is not bypassed because the client wants to insist.
Step 2 — Document the divergence in a separate document
A separate document (not the suitability report) should record:
The personal recommendation the firm made.
The client's chosen transaction.
The reasons why the transaction is not in accordance with the recommendation.
The risks of the transaction proposed by the client.
The reasons why the firm did not recommend that transaction to the client.
Robust warnings should be given and documented. The separate document should not attempt to justify the client's choice as if it were advice — it should record the firm's advice and the client's insistence against it.
Step 3 — Obtain a written acknowledgement from the client
nThe firm should obtain from the client an acknowledgement that:
The transaction is not in accordance with the firm's personal recommendation.
The transaction is being carried out at the request of the client .
Where possible, the acknowledgement should be in the client's own words , not a pre-printed tick-box. The adviser should keep both the suitability report and the insistent-client acknowledgement on file.
Insistent Client vs Execution-Only
These two routes are often confused. They are not the same.
- Feature Execution-Only Insistent Client
- Personal recommendation given? No Yes, then rejected
- Suitability rules apply? No (subject to COBS execution-only conditions) Yes — advice must still be given first
- Reason for transaction Client initiates without advice Client insists against advice
- Documentation Execution-only disclosure Suitability report plus insistent-client document
Execution-only is a service where the client initiates a transaction without any personal recommendation. Under COBS the firm must not recommend the product and must take reasonable steps to ensure the client understands the risks. An insistent-client route cannot be used to dress up what is really execution-only as if it were advised — the FCA has flagged this as poor practice.
Documented Authority Required
For an insistent-client transaction the firm should hold on file:
The completed fact-find.
The suitability report (with the firm's personal recommendation).
The separate insistent-client document setting out the risks and reasons.
The client's written acknowledgement in their own words where possible.
Any additional warnings given (e.g. for pension safeguarded benefits, where the client must have received appropriate pension advice from a qualified adviser if the transfer value is £30,000 or more).
Without this documented authority, the firm has no defence if the client later complains that they did not understand the risks.
Communicating the Recommendation to the Client
A recommendation is only effective if the client understands it. Practical steps:
Walk the client through the suitability report in the meeting, not just send it afterwards.
Use the client's own language when restating their objectives.
Check understanding by asking the client to summarise the recommendation back.
Confirm key risks and disadvantages explicitly.
Signpost cancellation rights and the firm's complaints procedure.
Provide the report in an accessible format (large print, audio, translation) where the client needs it.
Common Recommendations Pitfalls
Boilerplate suitability reports : templates that restate the rules rather than the client's actual circumstances.
Missing disadvantages : only positive features are mentioned.
No reasons why not : alternatives are not addressed, so the client cannot judge the trade-off.
Confusing insistent-client and execution-only : trying to use one to avoid the obligations of the other.
Inadequate vulnerability adjustments : failing to confirm the client understood the recommendation.
Closing the Advice Process
The advice process closes when:
- The client accepts the recommendation and the transaction is implemented, or
- The client insists on a different transaction and the insistent-client procedure is followed, or
The client declines to proceed (in which case records need not be retained under COBS 9.5, but good practice is to keep them), or
The firm decides it cannot recommend and no transaction is facilitated.
Whichever route is taken, the file should allow a third party — the FCA, the Financial Ombudsman Service, or a successor adviser — to understand what was recommended, why, and what the client agreed to.