Client Onboarding Procedure

Independent Advice Ltd, trading as H.J. Scott & Co — Document ref. [[document reference]] — Effective date [[effective date]]

Document Control

Version	Date	Author / reviewer	Summary of changes
1.0	[[date]]	Howard Scott (SMF16)	First house-style Client Onboarding Procedure, built out from the firm's working onboarding notes (four meetings: Initial Discovery, Risk & Platform, Solution, Bedding-in). Retains the original approach and stages in full. Adds explicit tagging of each stage against the Consumer Duty's four outcomes and three cross-cutting obligations, and adds the underlying FCA Handbook / MLR 2017 references throughout. This document is the fuller companion to the brief "Client Onboarding Process" paragraph in the Compliance Plan, and should be read alongside the Client Journey Map, Vulnerable Persons Policy, Consumer Duty Governing Body Report and Data Security Risk Assessment.

Owner: Howard Scott, SMF16 (Compliance Oversight). Next review due: [[next review date]], or sooner following any material change to the onboarding process, the firm's target market, or relevant FCA rules.

Drafting note: this document is built from Howard's working onboarding notes, expanded to house style. The four meetings, their content and sequence are unchanged. This document should be checked by Howard against actual practice, then reviewed by Gareth Johnson before adoption, consistent with the firm's practice for other significant compliance documents.

Our Approach

We provide a bespoke, individual service to our clients. We do not operate a transactional business. There is no "one size fits all" approach. We aim for long-term client relationships. We tailor our client service to suit their needs and aim for good client outcomes. We strive for high levels of client satisfaction on a daily basis.

This approach is the practical expression of our obligations under the Consumer Duty's cross-cutting obligations (PRIN 2A.2, FCA Handbook) to act in good faith, avoid causing foreseeable harm, and enable our clients to pursue their financial objectives — and of the four retail customer outcomes set out below, which this procedure is deliberately structured around.

1. The Consumer Duty: Cross-Cutting Obligations and Four Outcomes

Every stage of onboarding is designed with the following in mind. Each meeting below is tagged against the outcome(s) it most directly supports, so that the connection between what we actually do and our regulatory obligations is visible throughout, not just asserted at the front of the document.

1.1 Cross-cutting obligations

Obligation	What it means in onboarding	Reference
Act in good faith	Open, honest engagement from the first triage conversation; no hard sell; clients are given time and space to decide whether to proceed.	PRIN 2A.2.2R
Avoid causing foreseeable harm	Vulnerabilities are identified and taken into account from the very first meeting; clients who are not a fit for our model and target market are declined, elegantly, rather than onboarded regardless.	PRIN 2A.2.3R; Vulnerable Persons Policy
Enable customers to pursue their financial objectives	The whole process — from discovery through to the bedding-in meeting — is built around understanding, and then meeting, what the client is actually trying to achieve ("Clouds and Pavements").	PRIN 2A.2.4R

1.2 The four outcomes

Outcome	What it means in onboarding	Reference
Products and services	We only take on clients who are a good fit for our discretionary management proposition and target market; the target market assessment starts at the triage meeting, not after the client has signed up.	PROD 3.2 – 3.3
Price and value	Costs and charges are disclosed clearly, in writing, before any commitment is made, via the Client Agreement, Disclosure document and Key Features Document/illustration.	COBS 6.1ZA; COBS 13 & 14
Consumer understanding	Communications are tested for understanding at every stage — the platform is explained and demonstrated before the client uses it, and the bedding-in meeting exists specifically to check understanding has actually landed.	PRIN 2A.4
Consumer support	Support does not stop at the point of sale: the bedding-in meeting, ongoing platform access help, and Howard's blogs are all deliberate, planned continuations of support after onboarding completes.	PRIN 2A.5

The firm's overall approach to monitoring these outcomes, and reporting on them annually, is set out in the Compliance Plan's Consumer Duty section and the Consumer Duty Governing Body Report.

2. Initial Discovery Meeting

Products & ServicesConsumer Support

Triage meeting. Meeting to be held at the firm's office, Suite C, Futura One, Aspinall Way, Middlebrook, Bolton, BL6 6PG.
Discussion of why the client requested the meeting; client aims.
Note any vulnerabilities and take these into account — see the firm's Vulnerable Persons Policy; PRIN 2A.2.3R.
ID viewed if available — first step of customer due diligence under MLR 2017, reg. 27 – 29.
Discussion of the services we can offer.
Time for us to evaluate the client, and them us.
Suggest they review our website if they haven't done so already, to get a feel of who we are and how we work.
Clients are invited to get back in contact with us should they wish to proceed; no hard sell. We like to use the "join-up" method. Clients need to be a good fit for our model and target market — target market assessment, PROD 3.2 – 3.3.
Wait to hear.
Otherwise, potential clients who don't fit are elegantly disengaged at this point.

3. Second Meeting: Risk & Platform

Price & ValueConsumer UnderstandingProducts & Services

If possible, please appoint at the client's home. Clients are often more relaxed in their own environment.
Check the client is happy with the Client Agreement and Disclosure document — pre-contract disclosure, COBS 6.1ZA.
Full client details taken.
Attitude to Risk discussion and recorded. Recommended portfolio suggested — suitability assessment: knowledge and experience, financial situation (including capacity for loss) and investment objectives, COBS 9.2.1R / COBS 9A.2.
Explanation of why we use a platform, with an example of what they will see.
Copies of ID taken if not already on file — MLR 2017, reg. 27 – 29.

4. Solution Meeting

Price & ValueConsumer UnderstandingProducts & Services

Final check of AML details on file. Verify application completed — MLR 2017 customer due diligence sign-off; Compliance Plan, Money Laundering Regulations.
"Clouds and Pavements" discussion: where the client is now, where they would like to be — the practical expression of enabling clients to pursue their financial objectives PRIN 2A.2.4R.
Presentation of the Key Features Document and illustration — COBS 13 & 14.
Completion of paperwork. Instructions to proceed are only actioned once received in writing (including email), consistent with the firm's position on taping/telephone instructions in the Compliance Plan.
Log-in details for the platform issued.

5. "Bedding-In" Meeting (approximately 3 months after completion)

Consumer SupportConsumer Understanding

The client is invited to a further meeting once investments have settled, to ensure:

100% satisfaction.
100% understanding.
That what they expected has occurred.
The opportunity to encourage further questions.
Check the client is able to log in to the platform. Encourage clients to bring devices to assist where appropriate.
Reminder of Howard's blogs.

This meeting is the point at which we test, directly with the client, whether the products and services outcome, the price and value outcome and the consumer understanding outcome have actually been achieved in practice — not just documented as intended at the point of sale. Any gap identified here feeds into the firm's annual Consumer Duty outcomes monitoring.

6. Record Keeping

Records generated at each stage of this procedure are retained in accordance with the retention periods set out in the Compliance Plan's Record Keeping – Data Security – GDPR section and the Data Security Risk Assessment COBS 9.5.7R; SYSC 9. Filing follows the firm's standard split between the CRM and the client's cloud file:

Record type	Where filed
Meeting notes taken at each stage (Discovery, Risk & Platform, Solution, Bedding-in), including Attitude to Risk discussion, aims, and "Clouds and Pavements" notes	Transposed into the fact-find section of the firm's CRM
Original client documents – e.g. ID copies, and any other original documents taken during onboarding	Held against the client's file in Apple iCloud

This is consistent with the data inventory in the Data Security Risk Assessment, Section 1, which records client identity, contact and financial-planning data as held across the website/WordPress database and Apple iCloud.

7. Related Documents

This procedure should be read alongside the Client Journey Map, the Compliance Plan (Client Onboarding Process and Consumer Duty sections), the Vulnerable Persons Policy, the Consumer Duty Governing Body Report, and the Data Security Risk Assessment.

08/09/202405/01/2025

Long and Variable Lags

Milton Friedman, the conservative University of Chicago economist and Nobel Prize winner, started talking about long and variable lags in the late 1950s. He described that the process central banks follow to aid or retard economic activity by adjusting interest rates up or down is fraught with timing issues. When interest rates rise, they will eventually show their effect, but very little change occurs immediately.

Think of economic activity as a fully laden oil tanker, when the brakes are applied it takes miles and miles before the slow down to a standstill finally occurs. The knack therefore is not to brake too late or the tanker will run aground.

There is an emerging fear that central banks should have applied the brakes months ago.

We have watched valuations of our portfolios ebb and flow over summer in typical fashion. Veteran investors have experience of lower return summer months and higher return winter months. But suddenly September is back to haunt us once more as the month of the year which typically gives the lowest returns. This year it’s negative returns so far, taking our valuations down to the lowest point since April.

The US Federal Reserve has maintained the confidence of market participants so far as a delivery of a “Soft Landing” seemed to be achievable. In turn this soft landing was anticipated here in the UK and across Europe. Last October in “Have Interest Rates Peaked?” I said;

The real indicator for central banks is the level of unemployment. So far the rises have been low, but at some point the trickle picks up speed and then it positively floods higher if central banks send rates too high and put companies out of business. The level of un-employment itself is a lagging indicator. The numbers aren’t reported until it is too late and those individuals are placed on “the dole” or whatever it is called today.

17/07/202405/01/2025

The First 6 months of 2024

At the halfway point of the year

Well 6 months have flown by, and so far the returns generated in the portfolio reflect a “normal” investment year. If there is such a thing these days? The first quarter is usually strong, followed by a quarter of catch-up, which is reflected in the returns generated by our main portfolios so far this year. All portfolios remain on target to achieve their annual targets at this point.

What’s a “normal” year?

Veterans of our investment management service know that we generate the bulk of our returns in the 1st and 4th quarters of the year, with the 2nd and 3rd quarter usually only generating less than 25% of the years returns in total.

July to October should drift along nicely with little to show by way of returns, but hopefully without major wealth threatening dramas either. That said, July started with political meltdowns in France which potentially jeopardise the future of the EU as a trading block and of course the attempted assassination of a US President in waiting and the realisation that the current POTUS probably hasn’t been calling the shots for years. Political drama enough already!

Did we navigate the UK General Election in OK shape?

On the whole yes, but as always we could have done better in hindsight. We positioned for the likely result, which wasn’t exactly hard given every man and his dog also guessed the likely colour change in parliament. There was no shock in the markets as was expected by the UK shock index I referred to in my previous blog.

We expected a drop in Big Oils – Shell & BP (Labour’s Net Zero promises) and utilities UU, South West Water, Centrica etc. (The threat of nationalisation) – we have not held any of these shares for some time. However we did not position ourselves as heavily in social house builders eg. Vistry in particular and the others Barretts etc. as the FTSE 100 index does, which was perhaps a missed opportunity.

07/06/202405/01/2025

Don’t mention it

If you wish to avoid embarrassing moments at dinner parties there are some rules you must follow.

Don’t talk about politics.
Don’t talk about religion.
Don’t talk about sex.
Don’t spill any red wine. (Sorry Stephen & Aileen)

Well because this isn’t a dinner party, I guess I’m free to talk about them all. In fact, although the first three rules should sound like 3 separate subjects, they are now all inextricably linked. What’s more, it’s becoming increasingly difficult to have a view on one without needing to have a corresponding tribal view on all three. What am I talking about? Thursday 4th July. Independence Day in the US, but a General Election here in the UK.

Expected effect on investment markets.

Yes the day has come where we will be asked to choose the party to form a government for the next 5 years. A time where the expectation is stock markets will be volatile. But wait a minute, it seems that the “Risk Index”, the VIX in the US and the Citi Macro Risk Index here in the UK is sitting at roundabout all time lows. Just look at the 20 year chart below. This suggests there are no nasty market surprises just around the corner.