Why many firms check a sample of files, and how to check every one
A thorough file review takes half a day, so many firms check a sample and hope the rest are sound. Here is where that time goes, and how Scrutineer makes checking every file the normal way of working.
On this page
- Why sampling became the norm
- Where the half day goes
- A worked example
- What Scrutineer does
- How to check the output
- A five-point check before you sign off
- What checking every compliance file changes
- The numbers
- What you still do
- Frequently asked questions
- Does Scrutineer replace our compliance team?
- What does Scrutineer check a file against?
- Where are client files processed?
Compliance file checking is one of those jobs everyone agrees matters and nobody has time to do properly. A thorough review of a single client file takes half a day of a compliance manager's time, or a day rate from an outsourced consultant. So many firms do the sensible thing with the time they have: they check a sample and hope the rest of the back book is sound.
The trouble with a sample is the files nobody opened. That is where the risk sits, quietly, until a complaint or a regulatory review finds it first.
Why sampling became the norm
Sampling is a rational response to cost. If one review takes half a day, coverage is limited by what the firm can afford to read, rather than by where the risk is.
The rules do not ask for a sample. They ask for good records and for monitoring. SYSC 9.1.1R says "A firm (other than a common platform firm) must arrange for orderly records to be kept of its business and internal organisation… sufficient to enable the FCA to monitor the firm's compliance" (SYSC 9.1). Under the Consumer Duty, firms must "regularly monitor the outcomes retail customers receive from" the products they distribute, their communications and their customer support (PRIN 2A.9.8R). A sample can tell you something about those outcomes. It cannot tell you anything about the files it skipped.
Where the half day goes
Very little of a file review is judgement. Most of it is reading and assembling:
- finding and opening every document in every subfolder, including the scanned ones;
- working out what is there and, harder, what is missing;
- reading the fact find, suitability letter and review notes against the rules that apply;
- writing each finding up with the rule it engages and the evidence behind it.
The judgement at the end is the valuable part. Everything before it is the reason the review takes half a day.
A worked example
Take an ordinary annual review file for a long-standing client. A reviewer working by hand will typically:
- open the folder and find the updated fact find, the review letter, the valuation, the charges disclosure and the meeting notes, some scanned, some in subfolders;
- build a list of what is present and compare it with what should be there;
- read the review letter against the client's objectives, attitude to risk and capacity for loss;
- check that the ongoing charge relates to a service that was disclosed and actually delivered;
- write up each finding with the rule and the passage that supports it, then list the actions for the adviser.
Steps one, two and five are mostly searching, listing and typing. Steps three and four hold the judgement, but even they start with a long read. That is the half day.
What Scrutineer does
Scrutineer reads an entire client file the way a compliance reviewer would, then scores it in minutes.
- Point it at a folder. It inventories and reads every document in every subfolder. Scanned paperwork is read with on-device text recognition, and meeting recordings in the file are transcribed on the machine, with nothing uploaded.
- Two scores and a verdict. A compliance score against FCA suitability and disclosure standards, a file-quality score against your firm's own standard, and an overall verdict of Suitable, Unclear or Unsuitable, plus a separate disclosure assessment.
- Findings you can defend. Every finding names the rule it engages, such as COBS 6.1A or PRIN 2A.4, and quotes the passage from the file that supports it.
Each review also comes with section scores (AML refresh, communication records, risk reassessment, service delivery, suitability confirmation and client information), outstanding file actions and a missing-document checklist, so the follow-up work is laid out rather than left to memory. Reviewers can also ask the FCA Handbook a question and get an answer with the rule reference.
How the worked example maps across:
| Stage | By hand | With Scrutineer |
|---|---|---|
| Finding documents | Opening every subfolder, scans included | Every document inventoried and read, scans read on the device |
| Spotting gaps | Comparing against a mental list | A missing-document checklist for every client |
| Scoring | One reviewer's view, which varies by reviewer | Two scores and a verdict against a stated standard |
| Writing findings | Typed up with the rule and the evidence | Each finding names the rule and quotes the passage |
| Follow-up | Notes or an email to the adviser | Outstanding file actions listed |
| Year on year | Rarely compared | Review periods compared side by side |
How to check the output
A faster review is only useful if you can trust it, so Scrutineer shows what it based each score on:
- it flags any review that could only read part of a folder, so a score is never quietly based on half the evidence;
- it learns from your own benchmark scores, so its standard moves towards your firm's judgement rather than a generic one;
- it keeps separate rule packs for new client files and annual review files;
- it compares review periods, so you can see a file improve or slip year on year.
A five-point check before you sign off
- Was the whole folder read? If the review flags a partial read, find out what was missed before relying on the score.
- Do the quotes say what the finding claims? Open two or three of the quoted passages and read them in context.
- Was the right rule pack used? A new client file and an annual review file are judged against different expectations.
- Do you agree with the verdict? Treat Unclear as a prompt to look at the evidence yourself.
- Are the actions owned? Give each outstanding action an adviser and a date.
Where you disagree with a score, record your own; that benchmark moves Scrutineer's standard towards your firm's. For the full list of what a sound file should contain, see our compliance file review checklist.
What checking every compliance file changes
The bigger change is coverage. When a review takes minutes, checking every file stops being an ambition and becomes the default. Your reviewers spend their time on the files that need a human, not on finding out which ones those are.
It also changes the quality of your management information. The FCA's review of outcomes monitoring says firms should show "What their information tells them. How they use it to identify risks or issues. What action they take in response." A dashboard of every check, with the client, both scores, the verdict and what needs attention, gives you a record of what was found and what was done about it across the whole book, not just the sample. The conclusions, and the responsibility, remain the firm's. We cover what good evidence looks like in Consumer Duty evidence for advice firms.
The numbers
Our estimate is that a file review drops from around half a day to a matter of minutes, a saving of about three and a half hours a file. At three files per adviser a month, that is roughly ten and a half hours back every month, by our estimate.
Scrutineer costs £99 per adviser per month, excluding VAT, with no contract. At the £150 charge-out rate our homepage calculator uses, the first hour it saves each month more than covers it.
What you still do
Scrutineer does the reading. Your compliance team still does the deciding: challenging a finding, agreeing remediation and signing the file off. With optional encrypted sync, which is off by default, several reviewers can share one picture of the back book.
Frequently asked questions
Does Scrutineer replace our compliance team?
No. Scrutineer does the reading and the first scoring. Your reviewers still challenge findings, agree remediation with the adviser and sign the file off, and responsibility for the file stays with the firm.
What does Scrutineer check a file against?
FCA suitability and disclosure standards for the compliance score, and your firm's own file-quality standard for the second score. Separate rule packs cover new client files and annual review files, and every finding names the rule it engages.
Where are client files processed?
Scrutineer runs on your own Mac or Windows computer. Scanned documents are read with on-device text recognition, and the AI work goes through your firm's own Claude or ChatGPT account, so documents are sent to that provider under your firm's own account. IFA Tools does not hold your client files.
See it on a demo firm in twenty minutes on Microsoft Teams with Adam Booth, with nothing to prepare. Book a demo, or read more about Scrutineer.
