FCA advice supervision chief talks professionalism and value for fees

Debbie Gupta took over as co-director for financial advice and life insurance at the FCA last year. She will be taking a deep dive into where the regulator really stands when it comes to advisers with a presentation at our Money Marketing Interactive conference in April.

Before taking to the stage, she discusses why she is optimistic about improving professionalism and getting the right solutions for the right clients.

What is the most encouraging advice market trend you are seeing at the moment?

Advisers focussing on improving professionalism. We are seeing an increasing number of advisers continuing their studying and pushing on towards Level 6 and Chartered status.

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There is a greater focus on continuing professional development and we have seen more and more advisers attending events that support this. We are seeing many more firms seeking to do the right thing for consumers. For example, many firms provided valuable intelligence to help us in our work on the British Steel Pension Scheme.

How can advisers best show their fees are worth it?

It is important that firms think about the different client needs and tailor their propositions to meet them. Mifid II introduced a new suitability requirement requiring firms to opt for the cheapest/simplest products where available. The new costs and charges disclosure requirement in Mifid II will also help firms demonstrate their added value.

In an ageing society, where consumers are increasingly reliant on retirement income to support their standards of living, and are often perplexed and bamboozled by the variety of products on the market, financial advice that brings peace of mind is to be valued.

What do you think marks out a truly innovative planning practice today?

We set up the Advice Unit to encourage innovation within the advisory sector. Innovation isn’t just about technology, but can also involve the outlook firms have towards their advice.

A common feature of innovative firms is that they are effective in building a culture of challenge towards the services they provide. Such firms constantly question how the evolving environment affects their business. For example, the introduction of the pension freedoms has led several firms to consider how whether their investment proposition still meets the changing needs of their clients in retirement.

See the full agenda for the Money Marketing Interactive conference, including speakers from the FOS, leading political minds and top financial planners

What is the one key skill all aspiring advisers should learn?

Advisers and advice firms should prioritise learning to make ‘acting in the customer’s best interest’ a meaningful cultural driver of ‘what good looks like.’ The key test for culture is that people do the right thing even when there id no rule or guidance to help them. It sometimes feels like we have a long way to go to have confidence we have the culture right in the financial advice sector.

If you could make a magic wand, what one thing would you change about how the advice profession operates in the UK?

Its reputation as a trusted and objective service, particularly to vulnerable consumers. Financial professionals are consistently rated as less trustworthy than, for example, healthcare or other public service professionals.

Debbie Gupta is giving the opening keynote presentation on What the FCA really wants from financial advisers  at MMI London. Register for your free place here.



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There are 13 comments at the moment, we would love to hear your opinion too.

  1. “Mifid II introduced a new suitability requirement requiring firms to opt for the cheapest/simplest products where available.”

    Is this right? if so this has passed me by and it’ll be a race to the bottom with everyone going into trackers with the lowest cost platforms.

    • Here it is Jamie/Neil:

      COBS 9A.2.19 EU: Investment firms shall have, and be able to demonstrate, adequate policies and procedures in place to ensure that they understand the nature, features, including costs and risks of investment services and financial instruments selected for their clients and that they assess, while taking into account cost and complexity, whether equivalent investment services or financial instruments can meet their client’s profile.

      • Understand that part of COBS Rory – which is how I’ve advised clients to date. Presumably this is the essence of PROD.

        This still really doesn’t read to me that all clients should be in the ‘cheapest/simplest’ solution. Simplicity and lowest cost are often best, but surely that cannot be presumed to be the same in every case?

        • I agree with you, the statement she makes in the article is extremely misleading as it does not map across to the COBs rule. If it is paraphrasing – it’s very poor.

      • Thanks Rory, but that doesn’t say the same thing, and is from COBS, not MifidII. Jamie paraphrased the comment from the article, not from COBS, that Ms Gupta says about the ‘new requirement’. It is that statement that requires clarification or amendment.

      • ‘taking into account cost and complexity, whether equivalent investment services or financial instruments can meet their client’s profile’ translates to ‘requirement requiring firms to opt for the cheapest/simplest products where available’?


        It might be paraphrasing but given the complexity involved it’s not been done well or in a helpful way.

  2. Same thoughts Jamie. Either Ms Gupta has found something in MifidII that nobody else has, or she is very badly mistaken. Could also be very poor journalism, so I’ve sent an e-mail to the Editor. Will post again with his reply.

  3. More regurgitation of the same! I getting tired this claptrap.We have to be professional and innovative or we would not have survived thus far.

    As IFA’s we have to continually assess “the evolving environment”and how it affects us or we won’t survive! Those aboard the’gravy train’ are starting to sound embarrassing as it’s all been said and done before!

  4. Isn’t this a bit worrying – the rules say nothing about cheapest or simplest as far as I can see:

    COBS 9A.2.1 R 01/10/2018
    When providing investment advice or portfolio management a firm must:

    (1) obtain the necessary information regarding the client’s:
    (a) knowledge and experience in the investment field relevant to the specific type of financial instrument, insurance-based investment product or service;
    (b) financial situation including his ability to bear losses; and
    (c) investment objectives including his risk tolerance,
    so as to comply with (2);

    (2) only recommend investment services, financial instruments and insurance-based investment products, as applicable, or take decisions to trade, which are suitable for the client and, in particular, in accordance with the client’s risk tolerance and ability to bear losses.

    I think there is an urgent need for clarification here.

  5. It is, as its always been-:

    Give 10 advisers a case you will get products form various different companies all costing various different amounts investing in various different funds…..also including their various different take on risk.

    I think its called independent assessment.

    But the only scenario that is right or will be right, is the company, price, risk and funds the FCA/FOS says it is.

    I think that is called, our ball our game, our rules

  6. “Mifid II introduced a new suitability requirement requiring firms to opt for the cheapest/simplest products where available”. This is extremely misleading as it suggests a product will only be suitable under the rules if it is the cheapest/simplest. So a fund that is cheap and simple is going to be the most suitable despite the fact it might have 4th quartile performance over the past 10 years!

  7. The word ‘trust’ was mentioned only fleetingly in this article. I would be very interested to understand how the FCA would quantify the trust between adviser and client, and the experience / knowledge gained by the adviser over many years, in its final analysis of what constitutes fair value for the consumer.

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