What duty does a financial adviser owe me?

A regulated financial adviser owes you several overlapping duties. Under FCA Conduct of Business rules (COBS), they must: know your customer (gather full information on your financial situation, objectives, and risk tolerance); give advice that is suitable for you specifically; ensure you understand the risks; charge fairly and transparently; and act in your best interests. These are not optional guidelines — they are regulatory requirements, breach of which can give rise to a complaint or compensation claim.

What does "suitability" mean in the context of financial advice?

Suitability means that the advice must be appropriate for you specifically — given your financial situation, investment knowledge and experience, financial objectives, and risk tolerance. An investment that is suitable for one person may be entirely unsuitable for another. The suitability assessment is not a box-ticking exercise — it requires the adviser to understand your whole picture and recommend only what genuinely meets your needs. Unsuitable advice is a breach of the adviser's regulatory and legal duties.

What is the FCA Consumer Duty and how does it apply?

The FCA Consumer Duty (effective from July 2023) sets a higher standard of care, requiring firms to deliver "good outcomes" for customers rather than merely meeting minimum suitability rules. Under the Consumer Duty, firms must consider the real-world impact of their products and services — not just comply with technical rules. While the Consumer Duty applies prospectively, it reflects an ongoing regulatory tightening that has been underway for years.

Is there a legal duty of care as well as a regulatory duty?

Yes. A regulated financial adviser owes a duty of care in the law of negligence, in addition to regulatory obligations. Breach of FCA rules is not automatically a legal claim, but negligent advice that causes a financial loss can give rise to a claim in negligence at common law. Advisers are also bound by the terms of their engagement letters and any express representations made to the client.

What is the "know your customer" (KYC) rule?

The know your customer requirement (found in FCA COBS 9 and 9A) requires advisers to gather sufficient information about the client before giving advice. This includes: their financial situation (assets, income, liabilities); investment objectives; risk tolerance; investment knowledge and experience; and capacity for loss. Advice given without gathering adequate information is likely to be unsuitable — and the failure to gather information is itself a breach of regulatory duty.

What happens if an adviser breached their duty of care?

If an adviser breached their duty of care and you suffered a financial loss as a result, you may claim compensation. Routes include: complaining directly to the firm; referring to the Financial Ombudsman Service (FOS); making an FSCS claim (if the firm has since failed); or taking court proceedings. The appropriate route depends on the size of your loss, the firm's current status, and the complexity of the issues.

Can I claim even if I signed a suitability report agreeing to the advice?

Yes. A suitability report is a document the adviser produces explaining why they believe the advice is suitable for you. Signing it does not prevent a claim if the advice was in fact unsuitable — the adviser cannot discharge their legal obligations simply by getting a signature. What matters is whether the advice was actually suitable given the information available at the time, not whether you signed a document. See our guide on what a suitability report is.

Financial Adviser Duty of Care — What Advisers Owe You Under UK Law

Nadeem PervazSolicitor, Edward & Amaury Solicitors SRA RegulatedFirm SRA No. 800525

Nadeem Pervazis a solicitor at Edward & Amaury Solicitors, a law firm authorised and regulated by the Solicitors Regulation Authority. Content is reviewed for legal accuracy and compliance with FCA guidance and SRA conduct standards.

Published: September 2026About the firm

TL;DR — Quick Summary

▸FCA-regulated advisers owe strict statutory and common law duties — including suitability, best interests, and transparent charging.
▸Unsuitable advice is a regulatory breach, regardless of whether you signed a suitability report.
▸The "know your customer" rule requires advisers to gather full information before advising — failure to do so is itself a breach.
▸The FCA Consumer Duty (from July 2023) sets a higher bar — firms must deliver good outcomes, not merely tick boxes.
▸Breach of duty that causes financial loss can give rise to FOS complaints, FSCS claims, or court proceedings.

Financial advisers in the UK are subject to some of the most demanding conduct standards in any regulated sector. These are not guidelines — they are legal and regulatory requirements, backed by enforcement powers and compensation schemes. Understanding what your adviser owed you is the starting point for understanding whether you have a claim.

Quick Answer

FCA-regulated advisers owe you duties of suitability, best interests, and transparent charging. Breach of those duties — causing you a financial loss — can give rise to a claim for compensation. Contact us for a free assessment of your case.

Your Adviser's Key Duties Under FCA Rules

Know your customer (KYC)

Must gather sufficient information on your financial situation, objectives, risk tolerance and knowledge before giving advice. FCA COBS 9/9A.

Suitability

Advice must be suitable for you specifically — not just appropriate in general. Unsuitable advice is a regulatory breach.

Best interests

Must act in your best interests, not in their own financial interest or that of the product provider.

Clear explanation of risks

Must explain the nature and risks of the recommended product in a way you can understand.

Transparent charges

Must disclose all fees and charges clearly — including any ongoing advice charges and any product charges.

Written suitability report

For certain regulated advice (including pension transfers, DB transfers), a written suitability report is mandatory.

Ongoing review obligation

Where an ongoing advice service is agreed and charged for, the adviser must actually provide that ongoing review.

What Constitutes a Breach?

Common breaches of financial adviser duties include:

Recommending a pension transfer without proper analysis of the benefits being given up
Advising a high-risk investment to a client with a documented low risk tolerance
Charging ongoing adviser fees without providing any ongoing service
Failing to explain the true cost of charges
Recommending a product paying higher commission without it being in the client's best interests
Relying on a client-signed suitability report that did not accurately reflect the client's circumstances

Financial Adviser Duty of Care — What Advisers Owe You Under UK Law

Your Adviser's Key Duties Under FCA Rules

What Constitutes a Breach?

Frequently Asked Questions

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