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Apfa says RMAR reporting costs advisers £10m a year

Apfa policy director Chris Hannant

Advisers are spending three working days a years meeting regulatory reporting requirements at a total industry cost of over £10m a year, research from Apfa suggests.

NMG Consulting has produced the figures based on an average £165 hourly adviser fee, and assuming that half the time spent on regulatory reporting could otherwise have been charged to clients.

The research shows advisers spend 24 hours each year on completing their retail mediation activities return.

Apfa says it is concerned about how much time advisers have to spend in complying with reporting requirements, given the impact of the RDR and the wider economic environment on adviser revenues.

Policy director Chris Hannant says: “Spending this much time on reporting is yet another drain on resources.

“We want to see the Financial Conduct Authority make the requirements they demand of advisers more streamlined, but we also want the purpose of the reporting to be made crystal clear.

“We support a drive towards greater transparency, but this will not be achieved by the unthinking collection or publication of more and more data with no clear aim. We need to be sure that what the FCA is asking advisers to provide is used by the FCA, especially given the time it takes to compile the information.”

The trade body is also awaiting clarification from the regulator over a change in wording in the FCA’s handbook which could mean advisers having to compile different sets of data than they first thought.

Advisers were originally told they would have to supply the FCA with the number of transactions they charged to clients as a one-off fee, but now the regulator appears to want the total monetary amount collected in one-off fees.

Hannant adds: “We are alarmed about the amendment made at the end of April, meaning a change to the data required from 1 May onwards.

“We have flagged this concern with the FCA, because if the data required is different from that needed in the run-up to May advisers cannot possibly be expected to deliver it with such short notice and little warning.”

Advisers submitting their RMAR after 30 June will have to complete new sections K and L, which requires firms to send the FCA additional information on initial and ongoing advice charges, whether advice is independent or restricted, and how advice is paid for.

The FCA plans to use this information to monitor how firms are implementing adviser charging.



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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Really there should be only one question. Does your firm meet the minimum financial requirements? IF the FCA then find this not to be case – you should be in trouble. That would save a lot of time that could be more profitably spent dealing with clients. I have no issues with the theory of regulation however the practical application is not always to the advantage of our clients.

  2. Soren Lorenson 30th May 2013 at 4:25 pm

    I completely agree on this. Is it me or as APFA finally found its mojo?

    Firstly the Gabriel system is so poorly written it is actually insulting in a ‘stuff you – just deal with it’ type of manner’.

    Secondly, most of the information is actually available in our accounts but the FCA want it in a slightly different format, over a slightly different period.

    I suspect that most of the complexity is because the FCA suspects it will make it harder for people to create false returns. In my view complexity is the friend of the fraudulent because it offers them the excuse that they didn’t understand what was required.

  3. They need the info because they want to charge your FCA fees based upon TOTAL turnover based on the FCA timescale rather than tax year.
    The FCA has a black hole in its accounts that it needs IFA’s to fill…simples and very little to do with transparency.

  4. That’s is a massive under-estimation of time in my opinion. Just the actual reporting alone takes 5 or 6 days a year to sort, then there is all the data inputting along the way.
    I am perplexed as to why I now have 73 different nominals for the income we receive as a firm, how is this level of information helping anyone?
    Does this really made us a better industry?

  5. Oh dear, this is what you get when you let a PR firm loose. Sure I can well believe it takes 24 hours. The reporting for a small firm is twice a year. But to then make a leap of logic by stating that half this time (or even a quarter) spent on regulatory reporting could otherwise have been charged to clients is just flim flam.

    My RMAR is due in June (my year end is 31 May) I complete the return on a weekend. Sure it’s a waste of time, but most importantly what do they do with the information? Bugger all. The whole system is predicated on their confidence in their computer system and programme. That’s the big laugh. Under FIMBRA the reporting was more robust and reliable. Provide a copy of your audited accounts and/or tax return. Current bank statements, a copy of the PII cert. Then there is no room for porkies. What else do they need to know that they can use or is indeed useful? There might be an A4 sheet of questions with a tick box, but all the additional stuff is just so much bureaucratic piffle.

    Pity APFA had to muck up a perfectly good and valid submission with the daft bit at the beginning.

  6. Pointless, ineffective, madness 30th May 2013 at 7:15 pm

    The RMAR fiasco, on top of countless other equally pointless time wasting items, are just different strands of their utterly destructive Existence Justification thinking and behaviour.
    You could probably “regulate” all IFAs with less than about 100 competent effective people, coupled with a rule book of no more than 25 intelligently written pages and save us AND the consumers hundreds of millions in costs and wasted time.

  7. Julian Stevens 30th May 2013 at 9:24 pm

    Will APFA publish the response, if any, that it receives from the FCA to this representation? If the response is just the usual brush-off or maybe none at all, a different strategy is needed. After all, the core of the problem is that the FCA is under no obligation to take any notice of anything that anybody says. Just picking at bits of the malaise isn’t going to cure it. For that, we need an Independent Regulatory Oversight Committee with the unassailable authority to say to the regulator: This is wrong, unreasonable, totally OTT and you’re going to have to scrap it in favour of a fair and vastly simplified alternative. The Committee will expect your report within 3 months and, if that isn’t forthcoming, the present system will be scrapped forthwith, whether you like it or not, until you come up with an acceptable alternative. Now stop prevaricating, go away and get the **** on with it.
    Oh, how we wish.

  8. I was watching BBC2 and the documentary about Henry VII. He was concerned about ensuring his legitimacy to claim to the throne and to put down any possible rebellion. One method he used was to put in place a small unaccountable group (committee) which overrode existing legal process (and indeed pulled in existing cases to impose their own law) to suit their (King’s) purposes. It was after all for the good of the country. Wealthy and influential people were “charged” and effectively bonded to the King since to break the terms of their bond would financially ruin them. For some reason the FSA came to mind…..
    The main leader within the group was a certain Lord Dudley whose background was the City and when Henry VII died, such was the relief that Dudley was thrown into the Tower and executed. When the FSA went we have the leader a B****y Knighthood.
    3 monthly GABRIEL returns are easy and the RMAR return is a doddle and APFA have got this badly wrong. Using this argument does not wash – e.g. an adviser should not need to do this work. The issue is the effectiveness of these statistics, their consistency and interpretation by businesses doing business in different ways. For advisers (as opposed to product sellers) it is clearly demonstrable that this information is totally meaningless and the APFA should be asking for answers on this front. Why are we providing meaningless rubbish? But then the FCA will do their own thing…….

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