How to write a compliant Demands & Needs letter: an ICOBS checklist

A Demands & Needs statement is where your protection file lives or dies. It has to show what the client needed, what you recommended, why it is suitable, and that the client understood the trade-offs, all in language a real person can follow. Here is a practical checklist you can hold every letter against.

The core sections

• The client's circumstances: dependants, income, liabilities, existing cover and any gaps.
• The demands and needs you identified, in the client's own terms.
• What you recommended and, importantly, why: benefit, sum assured, term and provider, with the reasoning.
• Options considered and not taken, including anything the client declined and the risk they accepted.
• Affordability and how the recommendation fits the client's budget.
• Any vulnerability identified and the support provided.
• Costs, exclusions and the key trade-offs the client accepted.

Evidencing Consumer Duty

Under Consumer Duty you need to show good outcomes, not just a sale. Make sure the letter demonstrates the four outcomes in substance: the product and service fit the need, the price represents fair value, the client had the information to make an informed decision, and any support (especially for vulnerable clients) was appropriate. A file that only records what was sold, not why it was a good outcome, is the most common gap.

Common reasons a file fails a check

1. The 'why' is thin: the recommendation is stated but not justified against the client's needs.
2. Options not taken are missing, so there is no evidence the client made an informed choice.
3. Replacement of existing cover is not properly assessed or explained.
4. Vulnerability is noted but the support given is not recorded.
5. The language is jargon, so it is not clear the client could have understood it.

Make it faster without cutting corners

The discipline above is non-negotiable, but the typing is not. Purpose-built drafting takes your guided fact-find and produces a first draft that already carries these sections and the Consumer Duty framing, so you spend your time reviewing and tailoring the advice rather than re-writing structure every time. You stay responsible for the file; the tool removes the blank page.

This is general information for advisers, not regulated advice or a compliance sign-off. Your firm's compliance function remains responsible for your file standards.