FCA: Advice is one of the UK’s greatest success stories

The FCA is confident in the future of the advice industry but will need further feedback as it sets about reviewing the success of the RDR and the effectiveness of the Financial Advice Markets Review.

Speaking at an Adviser Home/Octopus Investments event this week, the regulator’s head of customer distribution policy Alex Roy said the FCA’s review will require advisers to hand over even more information.

He said: “There will be another data collection – hopefully small – on data and charging and advice models. We are also doing consumer research.

“Hoping there will be regular updates as we go and we are looking to hold more events and talk to more advisers. It’s about the industry pushing us as a regulator into a space that the consumer truly needs.”

The FCA is expected to issue its first full progress report on the review in the second half of next year.

The FCA’s 24 questions to advisers on RDR and FAMR

Roy said: “We really have been pleased in the last years since our first review of RDR. The key goal of RDR is making investment market better for consumers which we have seen in many ways. Our goal with FAMR was simpler, it’s about easier and more affordable access to advice.

“Financial services in the UK is one of the UK’s greatest success stories and advice is a major part of that success.”

Roy said the FCA is also aware that advisers are not always confident in its communications.

He said: “Unsurprisingly we hear a lot about the regulatory perimeters between firms and the FCA and we acknowledge that.”

The FCA has a vital role to play in meeting advisers’ expectations but remains committed to servicing customers rather than advisers which are its client, he added.

“I agree we could do more and I’d like to see us do more, but we will not move from that fundamental position of being around to protect consumers.”

FCA: RDR and FAMR review to look at firms’ robo offerings

The FCA outlined its concerns in the industry in a long-awaited call for input on its RDR/FAMR review in May.

These included fears that initiatives put into play to protect customers and foster transparency in the industry may not have been effective.

Roy said advisers have not, however, been forthright with presenting their ideas for a better functioning industry.

He said: “Following FAMR, the idea was to open the doors and tell the world we are here and open for advisers to come and bring their ideas for development and we’ve not had as many as we expected.

“We are here to help firms develop innovative solutions though our development and innovation hub. It’s important to us because we want to see consumers get the services they can afford.”

Ongoing concerns about pension transfers are currently high on the FCA’s assessment radar as it continues to collect data for the review.

Origo marks 20% rise in pension transfer volumes

Roy says: “We also heard a lot about defined benefit to defined contribution pension transfers and we’ve seen a lot of problem with quality of advice in this area and ongoing issues with PI insurance.

“This adds to the main things we have heard in the review so far which includes lack of access to appropriate services, unclear regulatory perimeter for advice, challenges around innovation, engaging consumers with the need for advice”

Remaining areas of concern the FCA is set to focus in the next 12 months include consumers’ struggles to assess the cost of advice.

Roy said: “Many may overpay for services they don’t need and advice may not be available for consumers with small pots. When we look at our work on advice and guidance we recognise support and help is needed now more than ever a people try to navigate themselves through difficult decisions.”

FAMR has not closed the advice gap, advisers rule

The watchdog also has plans to ramp up its look at conflicts of interest that could lead to poor outcomes.

It will spend more time assessing how technology can be used to support advice offerings.

Roy said: “We need to look at how technology can be used to create new solutions to meet customer needs because the flip side of professionalism is the more qualified advisers are, the more costs are pushed up.”


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. Who is this bloke ?
    Head of customer distribution policy ….? Wow !
    Does he have to announce this title in a dark sound proof room, I would !
    These people are rolled out, probably prodded out with a long broom handle, protesting “I don’t want to go out there, please don’t make me do it” answered with “just get out there and say some stuff” …

    Words as hollow as Diane Abbott’s head ! And as meaning full as a Frenchman’s vow of chastity!

  2. Very shortly there will only be advice for the rich. With 50% of advisers over 50, most looking to retire there will shortly be a massive advice gap. The cost of advice is set to go through the roof.

    PI which very rarely has to pay out, regulatory levies out of control, no rules, guidance that changes as and when it suits the regulator, FOS that does not use the rule of law with inconsistent outcomes, consumers with unregulated investments being compensated, regulated funds failing but it’s the fault of the advisers for their poor due diligence according to the regulator who regulates the fund when consumers complain, and the list goes on and on and on.

    Until regulators are held accountable for their actions this will not change. The system is so badly broken, but then who cares? Not the FCA, not the FOS, not the FSCS, not the Government as they have no liability at all. They get paid what ever happens and levy for their wages as they wish.

  3. What an insular view. The RDR has indeed professionalised those who remain as advisers, but so too has it colossally increased the cost of providing advice to consumers. The one size fits all definition of advice means that people with very simple needs have to see fully qualified advisers and get a full service. This full holistic service costs lots of money because of the regulatory straitjacket advisers find themselves in. They quite rightly fear that if things are not thoroughly documented then if there is a subsequent complaint they will lose and pay a large price. So they produce reams and reams of bum covering suitability information. MifID2 has made this overload of information even more severe, so that the general public are forced to pay high prices to get advice about simple things, and what’s more they are put off by the absolute mound of paper, figures and meaningless drivel they are presented with. The advice gap does exist, and there is a lack of differentiation between those who need simple advice with simple needs and those who will find it of value to get full blown holistic planning. It’s a disaster not a success

    • So, exactly which of the RDR requirements colossally increased costs – the professionalism requirements or the need to charge a fee? And despite this “regulatory straightjacket”, adviser firms’ turnover has increased 70% since the RDR was introduced and profits for the sector in 2018 are up 25% on the year before. So, what’s causing the high price…?
      “The one size fits all definition of advice means that people with very simple needs have to see fully qualified advisers and get a full service.” Well, that was there before the RDR, wasn’t it, because the RDR didn’t change the definition of advice – that was in MiFID.

    • Julian Stevens 18th July 2019 at 7:29 pm

      Reams of bum? Do you not mean reams of bumpf?

  4. Yes, it’s great having an advice profession isn’t it FCA. After all, if there wasn’t an advice profession there wouldn’t be anyone to stitch up to pay for abject regulatory failures like LC&F.

    Great comment from Mr Boleyn PFS.

  5. Julian Stevens 18th July 2019 at 7:35 pm

    The FCA’s “fundamental position of being around to protect consumers” basically boils down to forcing the good guys to pay for the sins of the errant minority, whose activities it fails time after time to identify, home in on and take swift and effective action to put a stop to.

  6. Trevor Harrington 19th July 2019 at 9:17 am

    As professional Advisers, we have existed under this regulatory debacle for 31 years.

    Despite the fact that we as individuals regularly recommend (through columns like this) ways by which the regulator can achieve it’s objectives, simpler, quicker, cheaper and very much to the advantage of the entire public, all of whom would have accessible professional advice. If only they would listen.

    They do not listen to us, they do not listen to the Treasury Select Commission, they do not listen to the Government … and they steadfastly refuse to appoint previous IFAs to their regulatory function.

    They do listen, to some degree, to the banks and the large service providers.

    When Gill Cardy created the IFA Centre, and subsequently when Garry Heath created Libertatem, I strongly recommended in my founder membership of both federations, that we should do as follows :-

    Members should pay their regulatory fees and FSCS levies through the federation, and that Federation should withhold payment to the regulator until constructive dialogue is achieved.

    I would estimate that constructive dialogue would commence about a fortnight after the fees were due – so about September time.

    Good idea eh ?

    There was no appetite for it in either organisation.

    We are where we are, and we will continue to be so until such time that we do something about it.

    • Trevor, I agree with the fee part of your comment….its just too easy for the FCA to collect what they like, when they like, from who they like, some sort of independent holding custodian is needed to give the FCA some accountability and justification.

      I do disagree with the first part, the FCA is VERY political and driven by the governments own agendas, this was very evident from Blair’s time in office and which has carried on to date, we have a situation where government wants the British public to spend spend spend (low interest, pension freedoms, easy unregulated borrowing) the FCA is just facilitating this drive, by grinding the industry to a halt, forwarding fines to the Treasury, and letting miss selling happen on an industrial scale (this both promotes extra fines and drives away the consumer from seeking advice ) and finally making advice the preserve of the wealthy.

      Also think on this….the FCA data collecting changed tack, around this time of Blair and Brown to the then RMAR….. its not coincidental that is focused on income and profit, you, me, our clients we are all being milked !

      This drive for money has been increased significantly over the past few years …….we have a NO DEAL brexit to fund, there was never going to be a deal, even if our MP’s agreed to a deal there is no way Brussels would !

      As for the TSC …..they just march on paper

      As I implied in my earlier comment, hollow words and insincere plans is the FCA mantra !

      • Trevor Harrington 19th July 2019 at 11:19 am

        @ DH
        We are not a million miles away from each other – Certainly paying our regulatory fees and FSCS through a custodian – perhaps there are others like us.
        If so, we need to hear from them.

        If this sort of thinking could gather speed from our own profession, then it may be that the simple threat of it might inspire the regulator to review it’s own position, and start acting on our advice.

        I am not holding my breath though …

        • Julian Stevens 19th July 2019 at 3:27 pm

          There’s not a snowball’s chance in hell of the FCA or any other body agreeing to give such powers to an external custodian. The howl of protest from the FCA would be along the lines of: But we screw up so regularly and so massively and mis-spend so much of our budget that we’d never get any money in at all and be bankrupt within a few months. It’d be a bit like Hector Sants’ observation that if individuals within the FSA (as was) were held to account for their failings, no one would be prepared to work for it.

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