A “tick-box” approach to assessing clients’ attitudes towards risk is not good enough and advisors should instead “sense-check” their recommendations to ensure they reflect clients’ true risk-profile, the UK regulator’s head of conduct risk has warned.

While a process-driven approach might be a good starting point for advisors’ assessments, it is essential that a “joined-up” approach is employed, Nausicaa Delfas told Money Marketing in an interview.

“You might have the processes in place and be ticking the boxes but what is actually important is whether the outcome for the consumer is the right one, so you need to cross-check and sense-check the findings,” she said.

“The specific sections of the investment process, from using a risk-profiling tool through to picking investment products, all link together and if they do not, you can end up in a different place to where you should be in terms of risk.”

She went on to say that the FSA was keen to work with the industry on the issue of risk suitability but that it would take action if problems remain ongoing.

The regulator has identified poor risk assessment as a real issue in the UK advisory industry: an FSA report published in March found that poor risk-assessment was at the root of half of the investment files that it deemed unsuitable for clients, the report said.