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Can the FCA get rid of Gabriel’s gremlins?

Can the much-criticised reporting system turn a corner in gathering useful data or is it simply destined to be the subject of complaints?

Incessant complaints from advisers about the complexity and tedium of the Gabriel reporting system continue to throw a key concern into the spotlight – is the FCA’s data collection actually achieving anything?

The regulatory reporting system, which stands for “gathering better regulatory information electronically” has long faced criticism for its alleged failure to yield useful information or insights to help stop problems in the advice profession.

Beyond its well-publicised tech troubles, advisers are concerned that their views on the Gabriel system are still not being considered.

Last year, the Complaints Commissioner quashed multiple complaint cases about Gabriel brought by advice firms.

Many centered on fees handed down for missing reporting deadlines and incorrect submissions advisers blame on incompetent back-end technology.

The FCA did not respond to questions about the number of late filing fees and complaints it had received that specifically related to Gabriel in the past year.

Money Marketing has placed a Freedom of Information Act request with the FCA to try to acquire more information on the regulator’s return collection.

With many unimpressed at the issues continuing to plague the system, Money Marketing takes a look at what improvements advisers can expect from the technology to justify their fees.

A system under pressure

The FCA also did not provide an answer when Money Marketing asked how many times the Gabriel system has been offline in the past 12 months.

Advisers say access to the site is often restricted and regularly bottlenecked in the weeks before returns are due.

The system buckled under the pressure shortly after launch in 2008, with predecessor regulator the FSA having to extend the reporting deadline for 3,000 firms.

The FCA blamed a major 2016 outage on a similar “physical hardware incident”.

The Complaints Commissioner urged the FCA to review its technology along with its internal systems last year.

In one case in September, Complaints Commissioner Antony Townsend said a complainant ordered to pay the £250 late submission fee received an “inappropriately worded” email.

Without prior warning, the email referred to a forceable collection of the fee through debt collectors.

Townsend said: “There was a gap in communication around this, and I suggest the FCA considers whether it needs to review systems to ensure that messages are clearly flagged.”

Money Honey Financial Planning managing director Jane Hodges filed her most recent Gabriel return on Monday, and had told Money Marketing beforehand she expected a frustrating process.

“I’ve had times where I had to try four times to get online. The problem is, you would think advisers would do this before the last couple of days, but if you’re doing a return due end of January, it’s all about your firms’ figures until the end of March.

“If you could gather everything earlier, there wouldn’t be a problem, but everyone seems to do it at the last minute, so sometimes you can’t access the system or you will be kicked off it and have to start over again.”

The tight turnarounds can be especially tricky for small firms which need to enlist the help of accountants.

Meldon & Co director Mark Meldon says there needs to be more support for the parts of the report that cannot be filed until the last minute.

The 10-part reporting in the Retail Mediation Activities Return requires advisers to detail profit and loss data, core businesses lines and training and competence records for staff.

Input also includes specific breakdowns on qualifications, continuing professional development, professional indemnity insurance costs and coverage, which requires more man hours each year for some advisers.

Meldon says: “Along with your insurance, it really is one of the darker spots of the year and it gets ever more tiring as the years roll on. There’s always more columns to fill in and more figures and increasingly complex information they want out of everyone. The worst bit is there appears to be no point to it all and the systems remain clunky.”

Hodges says smaller firms are also disadvantaged.

She adds: “Bigger firms have the technology to pull all the information together quickly for you and check it and have it ready, but smaller firms need to reconcile different parts of the equation at the back end and double check everything, and the turnaround time is very tight so that what you actually have in the report is as up-to-date as possible.”

Expert view

The FCA dictates rules on returns

Thank goodness, I don’t have to complete Gabriel returns. In many ways they are rather like tax returns. I have to submit paperwork for personal tax, corporation tax, PAYE and VAT. Recently, HM Revenue and Customs has issued fewer reminders, replaced by very aggressive letters. One letter received on corporation tax made threats if payment was late, but did not contain a payment slip. This had been sent in April, 10 months earlier than it was received.

Like HMRC, the FCA dictates the rules. There have been issues around Gabriel reporting for many years now. Like HMRC, it appears to be issuing fewer reminders to the advisers. At the same time, it has been accepted across the profession that the systems are not perfect.

The regulator should always make life as easy as possible for the adviser. The more time spent on regulatory systems and processes, the less time is available to ensure good, compliant advice.

It is in the FCA’s interest to be helpful to good advisers and to terrify bad ones. I am not sure it has the balance right on this.

Clive Waller is managing director at CWC Research

Another bonus for networks?
A Quilter spokeswoman says advisers in the Quilter-owned Intrinsic network have reporting done centrally to help the process along.

She says: “One of the benefits of being in a network is that, as the regulated entity, it completes the required returns rather than the individual appointed representatives.”

Like in many areas of communication with the FCA, networks may also have the upper hand on small firms when it comes to fixing any reporting problems that arise.

The Quilter spokeswoman says: “From time to time we do experience some technology issues with returns and at those times, we engage directly with the FCA and we have found it to be helpful in resolving things.”

However, smaller companies do have the advantage of personalised systems, Jacksons Wealth Management managing director Pete Matthew says.

“The thought of doing a network or national return makes me shiver. We can hone our information systems to make the job as easy as possible. I wouldn’t like to imagine what is needed for networks.”

Adviser view


Justin Modray
Director, Candid Financial Advice

Gabriel is such a cumbersome and antiquated system. I appreciate collecting varying data from a wide range of firms is a complex task, but it does feel like a very user-unfriendly data entry system from 20 years ago. That said, if the alternative is upgrading the system and that means the FCA has to look at spending tens of millions of advisers’ money, making some management consultants rich in the process, I can live with the current system. Looking at the bigger picture around Gabriel, I still do wonder how closely the FCA actually looks at the data advice firms input.

Clarity on fees
Another two complaints brought to the Complaints Commissioner in October argued late fees had been unjustly applied to firms following more website glitches.

In line with the wider industry effort to increase transparency on costs and bring clarity to charges, Townsend suggested the FCA should be obliged to practise what it preached.

In those cases, the FCA took the Commissioner’s recommendation to retract its £250 standard late fee.

While the FCA also responded positively to the Commissioner’s calls to consider updating its system, no further progress has been announced.

The Lang Cat consulting director Mike Barrett says advisers might be making excuses over their returns though.

“I do wonder if advisers will just complain about things like having to do their Gabriel return just because it’s a pain to get it done rather than because there are problems with the system,” he says.

Candid Financial Advice director Justin Modray says that advisers understand there cannot always be leniency.

He says: “The FCA has fined many firms in the past over missing a return deadline and I don’t have any sympathy, unless perhaps Gabriel was unavailable around the deadline.”

Adviser view 

Tony-Byrne-2012Tony Byrne
Financial planning director, Wealth and Tax Management

There have been no improvements whatsoever with Gabriel over the years. Spreadsheets need to be filled in manually and there is too much jargon that even advisers do not use. The notes that go with how to fill in the form are longer than the actual form itself. My fees have also gone up probably around 400 per cent in the past seven years. There’s just no joined-up thinking from the FCA on how to approach things and no one seems to be thinking what would be in the best interests of the advisers. You think there would be a big enough budget to fix things.

Modray adds: “Since the FCA states the penalty for the late submission in its reminder emails, it’s hard sometimes to see how advisers can plead ignorance.”

The regulator’s reminder emails to advice firms ahead of return deadlines remain the primary form of communication.

Firms hold sole responsibility for ensuring their contact details remain up-to-date on the FCA’s database.

In another Complaints Commissioner decision at the start of last year, a complainant alleged they had been charged the £250 fee after missing the deadline because the regulator had failed to send out its reminder email.

The Complaints Commissioner quashed the complaint as while it was unclear whether the emails arrived, the FCA was able to show they had been sent.

Hodges says advisers should still be able to expect some tolerance.

She says: “If you get unlucky and miss the deadline because you can’t get on, you’d hope there would be some sympathy at the end of it on the regulator’s side.

“Thousands of advisers need access to one very complex system at the same time, and with an understanding of IT, anyone could tell you that the back-end system is old compared to the current standard of technology, and needs updating.

“If the FCA is going to continue with its current technology it needs to listen and have a bit of leniency with people who have at least tried.”



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There are 9 comments at the moment, we would love to hear your opinion too.

  1. “While the FCA also responded positively to the Commissioner’s calls to consider updating its system, no further progress has been announced” pretty well sums up the FCA’s approach. Positive noises but no action.

    The overwhelming consensus, to which the FCA remains resolutely deaf, seems to be that the GABRIEL system is long overdue for a major and fundamental overhaul. Suggestions:-

    1. Define its purpose. One would think this should be to enable the FCA to regulate in a proportionate and appropriately targeted manner so as to enable it to identify, home in and put a stop to untoward practices that are potentially damaging to the industry and its customers, in line with its claim to “secure an appropriate degree of protection for consumers and to protect and enhance the integrity of the UK financial system”.

    2. Simplify it.

    3. Make the data required relevant to what the regulator actually needs to know to do its job better. What, for example, is the relevance of the question (as reported by somebody a few months back): How many complaints about pet insurance has your firm received during the latest reporting period? Saints preserve us.

    4. Install an additional bit of software to flag up automatically any potential trouble spots. And then

    5. Act on them.

    Is this list of criteria in any way unreasonable?

  2. There is more chance of ‘Gabriel’ (The Archangel) getting rid of the FCA gremlins

  3. Expert View

    The FCA dictates rules on returns

    Thank goodness, I don’t have to complete Gabriel returns.

    Hardly an experts view then if he doesnt complete the return!

  4. There really is a load of c*** being touted here.

    I have been completing these returns twice a year for 10 years and have never once not been able to log on.

    The reporting dates are in line with your company year end and you get 6 weeks from the end of year to complete the return. This is ample time if you plan properly.

    We are all professional, intelligent people and reading the guidance notes, regardless of how long they are! makes completion easy enough.

  5. I would agree with Justin. I’ve never had an issue getting onto the site.

    My main issue is that the system is so old fashioned that it doesn’t add up and compare columns in real time; so you enter the figures and add them up with a calculator and then it checks your maths when you press submit.

    Some of the pages are very complex but if you fail to press save or submit it time, it logs you out and you have to start again.

    Finally, some of the calculations required to get a fairly basic answer are ridiculous. For example, there is a whole page of accounts figures that need to be entered so that it can tell if you have sufficient capital adequacy. For small firms a simple, “Do you have more than £20K” would be sufficient.

    I’m not sure that much of the accounts information gives the FCA anything that they couldn’t achieve by looking at our regular accounts.

  6. Gabriel – include the no. of advisers and don’t forget the decimal point?
    Its not just about logging on and completing it is some of the nonsensical way the information is requested and for what purpose? I have never had a report back from the FCA with meaningful data.

  7. It is simply data gathering for the sake of gathering data. If firms were asked to supply a set of accounts, the number of SIPP’s & unregulated investments recommended & the FCA then paid a visit, we’d go a long way to stamp out the cowboys that still exist & lessen consumer detriment

    • You seem to be suggesting proportionate and appropriately targeted regulation with a view to the FCA getting the most value out of the effort that it makes, whilst delivering significant benefits to low risk and compliant businesses through better-focused inspection activity, increased use of advice for businesses, and lower compliance costs.

      All this is eminently and unarguably sensible and practical but, on the strength of its track record to date in complying with such a simple and reasonable set of principles, what hope can there be of it starting to do so now?

      FWIW, my understanding of the purpose of the GABRIEL/RMAR system is that it has nothing whatsoever to do with helping the FCA to identify, home in on and put a stop to bad practices on the part of the errant minority. All it’s about is determining how much each firm shall pay in the way of regulatory levies. So, in this regard, the FCA doesn’t even TRY to do its job properly.

  8. Perhaps the title of this article should be not Can the FCA get rid of GABRIEL’s gremlins? to which the answer must surely be yes ~ why ever should it not be able to? ~ but WHY has it STILL not yet done so?

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