Is a Risk Analysis Report required under FAIS?

A documented needs analysis and risk assessment underpin the record of advice FAIS requires. Without evidence that you analysed the client’s circumstances and risk profile, it is difficult to show the advice was appropriate.

What is the difference between a RAR and a Record of Advice?

The Risk Analysis Report / needs analysis establishes what the client needs and their risk profile; the Record of Advice documents the recommendation and why it meets those needs. They are complementary parts of the same advice file.

Did FAIS change the risk-questionnaire requirement in 2025?

The regulatory emphasis on a documented, defensible risk assessment has increased. The practical takeaway is the same: capture the client’s risk tolerance, capacity and required risk, and keep the evidence with the advice record.

What if the client refuses to answer the needs-analysis questions?

Section 8(4) of the General Code covers it: alert the client that the information is incomplete, explain that this limits how appropriate the advice can be, and record that you did both. The limitation then forms part of the advice rather than a hole in the file.

Does a short-term broker need a needs analysis?

Yes. Section 8 is not limited to long-term or investment advice — the analysis is the same shape and the facts are sums insured against values at risk, existing cover across the client’s policies, indemnity periods, undisclosed exposures and the client’s capacity to carry an excess.

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Financial Needs Analysis & Risk Analysis Report (FAIS)

A Financial Needs Analysis (FNA) and Risk Analysis Report (RAR) are how a FAIS adviser proves the advice suited the client’s needs, objectives and risk profile. They sit under section 8 of the General Code — the analysis you do BEFORE advising — and the Record of Advice under section 9 records what you concluded. Here is what the analysis must establish, how to separate the three dimensions of risk so the recommendation is demonstrably suitable, what section 8(4) allows when the client will not give you the information, and how Broker AI drafts a client-ready report from the documents you upload.

Updated 19 September 2026

What a Financial Needs Analysis must establish

Section 8(1) of the General Code requires the adviser to take reasonable steps to seek appropriate information about the client, to conduct an analysis of that information, and to identify a product appropriate to the client’s needs and circumstances. A defensible analysis covers:

01The client’s financial position, dependants and existing cover.
02The client’s needs and objectives, prioritised.
03The client’s risk profile — tolerance, capacity and the risk required to meet the objective.
04The gap between existing cover and identified needs, and how the recommendation closes it.

Risk profiling: the three dimensions

A risk questionnaire should separate these so the recommendation is demonstrably suitable — and so the file shows WHICH of the three the recommendation was driven by. Collapsing them into one "risk score" is what makes an advice file hard to defend.

Risk tolerance

The client’s willingness to accept risk — an attitude, captured through the questionnaire.

Risk capacity

The client’s ability to absorb a loss without derailing their objectives — a financial fact.

Risk required

The level of risk needed to achieve the stated goal — where tolerance, capacity and objective are reconciled.

When the three dimensions disagree — and they often do

A cautious client with an ambitious objective is the ordinary case, not the edge case: tolerance says one thing, required risk says another, and capacity may permit either. The Code does not tell you which wins, and it does not have to — what it requires is that the recommendation be appropriate and that you can show why. So the analysis has to record the conflict and the resolution: that the client was told their objective is not reachable at their stated tolerance, and either the objective moved, the tolerance moved, or the shortfall was accepted knowingly. A file that shows a single reconciled number and no conflict is a file that either never asked or never recorded the answer.

Section 8(4): when the client will not give you the information

Clients decline to answer, and the Code anticipates it. Where you have not obtained the information the analysis needs, section 8(4) requires you to alert the client to that fact, to explain clearly that it limits the appropriateness of the advice, and to record that you did. The limitation is then part of the advice, not a gap in it — but only if it is written down. An unanswered question that appears nowhere in the file reads afterwards as one nobody asked.

The short-term version of the same discipline

Most FNA guidance is written for long-term and investment advice, which is why short-term brokers often assume the section does not reach them. It does — the analysis is the same shape, only the facts differ:

01Sums insured against actual values at risk, which is where the average clause turns an under-declared building into a partial payout.
02Existing cover across every policy the client holds, so the recommendation does not duplicate or leave a gap between them.
03Business interruption: the indemnity period the client can actually rebuild in, not the one on last year’s schedule.
04Exposures the client has and has not disclosed — a home office, a let portion, stock at another premises.
05The client’s capacity to carry an excess, which is a risk-capacity question wearing a short-term hat.

How the analysis reaches the Record of Advice

The FNA and the Record of Advice are different documents doing different jobs, and the join between them is what an adjudicator reads. The analysis establishes the need; the Record of Advice records the product recommended and why it meets that need. If the recommendation cannot be traced back to a need the analysis identified, the file has two documents and no argument. The practical test: pick any recommendation in the ROA and find the line in the FNA it answers.

Keeping it, and for how long

Section 3(2) of the General Code of Conduct requires advice records to be kept for five years. The needs analysis is part of that record, not a working paper — including the questionnaire the client completed, the version of it you relied on, and any note of information the client declined to give. Five years runs from the termination of the product or the rendering of the service, so on a long-running policy the file has to outlive several renewals.

Draft a Risk Analysis Report from the client documents

Broker AI reads the client and policy documents you upload, structures the needs analysis and risk profile, and drafts a Risk Analysis Report you review and finalise. Built for South African brokers.

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Frequently asked questions

Is a Risk Analysis Report required under FAIS?: A documented needs analysis and risk assessment underpin the record of advice FAIS requires. Without evidence that you analysed the client’s circumstances and risk profile, it is difficult to show the advice was appropriate.
What is the difference between a RAR and a Record of Advice?: The Risk Analysis Report / needs analysis establishes what the client needs and their risk profile; the Record of Advice documents the recommendation and why it meets those needs. They are complementary parts of the same advice file.
Did FAIS change the risk-questionnaire requirement in 2025?: The regulatory emphasis on a documented, defensible risk assessment has increased. The practical takeaway is the same: capture the client’s risk tolerance, capacity and required risk, and keep the evidence with the advice record.
What if the client refuses to answer the needs-analysis questions?: Section 8(4) of the General Code covers it: alert the client that the information is incomplete, explain that this limits how appropriate the advice can be, and record that you did both. The limitation then forms part of the advice rather than a hole in the file.
Does a short-term broker need a needs analysis?: Yes. Section 8 is not limited to long-term or investment advice — the analysis is the same shape and the facts are sums insured against values at risk, existing cover across the client’s policies, indemnity periods, undisclosed exposures and the client’s capacity to carry an excess.
How long must the needs analysis be kept?: Five years under section 3(2) of the General Code of Conduct, running from termination of the product or rendering of the service — so on a long-running policy the analysis has to outlive several renewals, along with the questionnaire version you relied on.

This page is general information about FAIS needs analysis, not legal or compliance advice.