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Advisers toe the line on FCA suitability review

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Only one client file out of the 1,166 requested by the FCA as part of its suitability review has not been supplied to the regulator.

The regulator first approached around 700 firms, including 500 smaller advice firms, last April, informing them they would be required to hand over client files as part of a review into advice suitability.

Firms had to complete an “advice register” detailing all personal recommendations throughout 2015, as well as a survey on advice split in to non-pension investments, pension accumulation and retirement income categories.

In response to a Freedom of Information Act request from Money Marketing, the FCA says 690 firms had been approached, but 24 were found to be out of scope because the business had either closed or was offering a non-advised service.

As at the beginning of 2017, each of the remaining 666 had supplied the advice register and survey response, with no sanctions for late responses or missing information.

A total of 1,166 client files were requested, 401 on non-pension investment, 386 on pension accumulation and 379 on pension decumulation.

Based on the list of recommendations and survey responses, another six firms were classified as out of scope so did not have to provide files.

The FCA says: “All firms met the deadline we set them. Some had the original deadline extended, due to reasons such as office moves, holidays, etc., but all files were received in a timely manner.”

Though the majority of the work has been done by internal FCA staff as part of “standard supervisory activities,” the regulator currently estimates to incur external costs of £6,000 over the course of the review, and no more than £7,500 in total.

The FCA also set up a ‘hotline’ for advisers with questions about the suitability review, which was used by around 450 advisers.

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Must be a slow news day. Why is it reporting that advisers have done what the FCA demanded? Had the headline read Advisers defy the regulator over suitability review then that would have been worth reporting.

    Just a thought

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