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Apfa: FCA’s smarter comms too expensive for small firms


The FCA’s best practice examples of smarter consumer communications fail to acknowledge the “prohibitive” cost of technology to smaller firms, says Apfa.

In a wide ranging discussion paper on communications in financial services in June, the FCA urged the industry to adopt “innovative” techniques to move away from a “paper-based mindset”.

It cited a number of good practice examples, including an online portal from Aviva and a series of videos from Nationwide.

But Apfa says in its consultation response: “We are concerned that the FCA paper fails to acknowledge that, particularly for smaller firms, investment in the kind of technology that the FCA has used as examples of good practice on its interactive discussion paper can be prohibitively expensive.

“Although we understand that better communications do not necessarily require the use of technology, we would appreciate clearer recognition from the FCA that smarter consumer communications are not necessarily about investment in technology and new systems, as seems to be implied by the heavy emphasis on such examples of best practice in the paper – and the way the paper is set up itself.”

Apfa says it favours a “layering” approach of disclosure documents, which would allow advisers to feature certain disclosures more prominently.

The trade body says: “It appears to us that ‘all rules are created equal’ where some information seems more urgent and important to consumers’ decisions than other disclosures.

“We would appreciate some thought at the FCA as to how to categorise these rules in ways that would ease the ‘layering’ of information disclosure that is mentioned in the discussion paper.”

Apfa director general Chris Hannant says: “We believe it is the broader regulatory environment, including the huge number of rules, combined with fear of how complaints are assessed by the Ombudsman that gives rise to the lengthy paperwork clients receive.

“We look forward to working with the FCA, the advice community and others to improve consumer communications especially in terms of developing the FCA’s layering concept and how this may apply to suitability reports.”


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. It’s the disclosure rules that need re-assessing rather than how this stuff is communicated. I took my 14 year old son to the bank this week to open his first account. The process took over half an hour, most of which was the unfortunate bank clerk reading irrelevant information to a disinterested teenager. He left with a 200 page booklet of small print that was given to him ‘in case you are struggling to sleep at night’.

    There may be 3 or 4 paragraphs of useful information in there but he will never find or read them.

    Rather than looking at better ways to communicate pointless information, the FCA would be better to reduce the information required to the absolute minimum that people might actually read and take in.

  2. A terms of business used to be 1 side of A4, an illustration 1 side of A4 and a Keyfacts about the product 2-4 sides of A4. That is about the level of “layers” consumers will read, the rest they rely on what the adviser TELLS them being clear, fair and not misleading and is why I keep saying meetings should be recorded to demonstrate intent. If we throw everything paperwise at the consumer, they will read NONE. If we ask them to sign more than 3 declarations, they will sign 30 UNREAD.
    Less is MORE appropriate with everything else as links to back documents as PDFs and webpages.

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