Debbie Gupta's comments on suitability and 'soft facts' present an interesting dilemma for firms. Suitability requirements have always been vague (possibly deliberately so) about what information a firm is required to collect in order to justify suitability. The rules use wording such as "Investment firms shall determine the extent of the information to be collected from clients [and] such information as is necessary for the firm to understand the essential facts about the client" (MiFID business) and "A firm must obtain from the client such information as is necessary for the firm to understand the essential facts about him" (Non-MiFID business). So there is the potential for moving goalposts here in terms of the regulator's expectations, which is particularly pertinent given the FCA''s latest suitability review.
What all firms should do is review their internal policy on know-your-client and consider the type of information that they expect to be collected for different types of client and advice, and then ensure that a system is in place to monitor compliance with that policy. That way a firm can show that they have considered this issue carefully and have taken steps to address it. It may look particularly poor for firms if they (i) cannot show that they have considered this issue at all, and/or (ii) have a significant level of variation in the information collected across the business by different advisers etc. As always with the regulator you should have a reasonably consistent approach and be able to justify that approach.