The FCA does not prescribe credit checks as a regulatory requirement under SM&CR. However, firms may choose to assess an individual’s financial stability as part of the Fit and Proper Assessment, especially for roles involving client trust and financial responsibility. Our template Fit and Proper Declaration helps meet this need by including key questions, such as whether the individual has any County Court Judgements (CCJs). The declaration also authorises the firm to conduct a DBS (Disclosure and Barring Service) check or a credit check if deemed necessary, ensuring firms have the right to carry out these checks as part of their due diligence.
If a firm decides to conduct a credit check to further assess an individual’s financial soundness, or if a lender requires them to be completed, this is permissible under the FIT rules provided that the individual consents. Consent can be easily obtained by having advisers sign the Fit and Proper Declaration, which grants the firm permission to complete these checks. A soft credit check is often recommended to avoid impacting the individual’s credit score.
