Information Gathering & Fact-Find

How advisers run the fact-find under COBS 9.2: information categories, hard vs soft facts, affordability, trust, record-keeping and retention.

The Fact-Find Process

The FCA's Know Your Customer rules (COBS 9.2) require advisers to gather a full and accurate picture of the client before giving any advice. The fact-find is the structured tool used to meet this requirement. It is a confidential document that records the client's circumstances, needs, priorities, and preferences. The fact-find becomes part of the client's permanent file and provides the evidence that any advice given is suitable, affordable, and based on real information. The FCA does not prescribe a fixed format, allowing firms to design a version that suits their clients and business model. This flexibility is essential — a mortgage adviser, for example, needs different details than an investment adviser.

Essential Information Categories

Although formats vary, every thorough fact-find covers the same core areas:

• Personal Information — Basic details such as age, address, marital status, and dependants. These help determine life-stage priorities and protection needs.
• Employment Status — Job type, employment arrangement, benefits, or business details for self-employed clients. This affects income stability and available benefits.
• Income Sources — All income streams — salary, pensions, rental income, investments — forming the basis of affordability assessments.
• Expenditure — Essential and discretionary spending. This is a regulatory requirement because advisers must prove that recommendations are affordable.
• Assets & Investments — Property, savings, investments, ownership structure, and expected returns. This shows existing provision and investment experience.
• Liabilities & Commitments — Mortgages, loans, credit cards, outstanding balances, and terms. These influence affordability and priorities.
• Objectives & Attitudes — Sometimes called "soft facts" — what the client wants to achieve, how important each goal is, and their concerns.
• Existing Financial Provision — Current policies, pensions, and investments. This prevents duplication and highlights gaps.
• Knowledge & Experience — How familiar the client is with financial products, guiding the level of explanation required.
• Attitude to Risk — How comfortable the client is with uncertainty and fluctuations in value.
• Estate Planning Arrangements — Whether wills exist, what they contain, and when they were last reviewed.

Hard Facts vs Soft Facts

Effective fact-finding captures both objective and subjective information.

• Hard Facts — Measurable, verifiable details such as income, mortgage balances, policy values, and number of dependants. They form the quantitative foundation for suitability and affordability.
• Soft Facts — Personal insights — attitudes, priorities, concerns, motivations, and aspirations. They reveal what truly matters to the client and guide how recommendations should be prioritised.

Information Gathering & Fact-Find

Analogy: Hard facts are the structure of the advice — the framework everything depends on. Soft facts are the personality — they give meaning and direction to the recommendations. Both are essential for well-rounded, client-centred advice.

The Affordability Requirement

Affordability is one of the most important parts of the fact-find. Advisers must be able to show that any recommendation is financially sustainable and will not put the client under strain now or in the future. Affordability assessments compare:

• Income
• Essential expenditure
• Discretionary spending
• Existing commitments
• Savings habits

Information Gathering & Fact-Find

The goal is to ensure the client can maintain the recommended contribution or premium without jeopardising their lifestyle or financial stability.

Building Trust Through the Fact-Find

Clients share highly personal information during the fact-find, so trust is essential. Advisers build trust by:

• Explaining the purpose of each question
• Demonstrating confidentiality and secure handling of information
• Showing patience and empathy
• Following up on unclear or incomplete answers
• Adapting communication to the client's style and comfort level

Information Gathering & Fact-Find

When clients understand why questions are asked, they provide more accurate and complete information.

Common Fact-Find Challenges

• The Private Client — "I don't see why you need to know about my other investments." Response: explain that full context prevents duplication, ensures consistency, and avoids conflicts with existing arrangements.
• The Impatient Client — "This is taking too long — can't you just recommend something?" Response: emphasise that rushing risks unsuitable advice and that thorough information gathering protects their interests.
• The Uncertain Client — "I'm not sure what I want — I just know I should be doing something." Response: use the fact-find to help them clarify their goals. The questioning process often reveals priorities they hadn't articulated.

Different Clients, Different Approaches

A 25-year-old first-time investor needs education and long-term planning. A 55-year-old nearing retirement needs income planning, capital preservation, and possibly estate considerations.

Documentation & Record-Keeping

The fact-find serves several critical functions:

• Evidence of suitability
• Proof of affordability
• Regulatory compliance
• Professional protection
• A baseline for future reviews

Information Gathering & Fact-Find

Good record-keeping ensures continuity even if the client later works with a different adviser.

Records & Retention

Advisers must keep clear, complete, and retrievable records showing suitability, disclosures, costs, and key decisions. Typical minimum retention periods:

• Pension transfers, opt-outs, FSAVCs — Indefinitely.
• Life & pensions suitability files — 5 years.
• MiFID business — 5 years (may be extended).
• Mortgages — 3 years.
• Non-MiFID investments / protection — 3–5 years depending on product.

Information Gathering & Fact-Find

Record-keeping protects both the client and the adviser.

Confidentiality & Data Protection

Fact-finds contain sensitive personal and financial information. Firms must:

• Store data securely
• Restrict access to authorised staff
• Use information only for legitimate advice purposes
• Explain clearly how client data will be used and protected

Quick recap — key revision points

Lock in the essentials before moving on.

• The fact-find is the structured tool used to meet the FCA's Know Your Customer rules (COBS 9.2).
• It is a confidential document that records the client's circumstances, needs, priorities and preferences and becomes part of their permanent file.
• The FCA does not prescribe a fixed fact-find format; firms design one to suit their clients and business model.
• Hard facts are measurable, verifiable details (income, balances, dependants); soft facts are attitudes, motivations and aspirations.
• Affordability assessments compare income, essential expenditure, discretionary spending, existing commitments and savings habits.
• Pension transfers, opt-outs and FSAVCs must be retained indefinitely.
• Life & pensions suitability files and MiFID business records must be kept for at least 5 years.
• Mortgage records must be retained for at least 3 years; non-MiFID investments and protection for 3–5 years depending on product.
• Firms must store fact-find data securely, restrict access to authorised staff, and use it only for legitimate advice purposes.