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FCA defends ‘pragmatic’ data collection despite anger over rising costs

FCA chairman John Griffith-Jones has defended the regulator’s “pragmatic” data collection despite industry concerns over escalating costs.

Speaking at a Wealth Management Association conference in London this morning, Griffith-Jones said good data is a precursor to good regulation.

Last week, Treasury select committee chair Andrew Tyrie hit out at the regulator for “mindless” data collection from regulated firms.

Last month, adviser trade and professional bodies united to demand an urgent FCA review into the retail mediation activities return following adviser anger over increasing regulatory costs.

Research from the Association of Professional Financial Advisers puts the total industry cost of meeting regulatory reporting requirements at over £10m a year.

Griffith-Jones said: “While I can sympathise, and have been lobbied pretty vigorously by your leadership, about the amount of time spent wading through our consultation papers, guidance documents, our calls for evidence and our requests for data; my sympathy is tempered by a little bit of pragmatism.

“By all means keep challenging us on the volume of requests but do not lose sight of the value of good data as a precursor to better regulation.”

Griffith-Jones says the greater use of thematic reviews and collecting data from firms is to enable the regulator to spot future problems.

He said: “One of the key developments in our approach is to try and signpost more effectively our direction than in the past. For example, using regulatory levers like thematic reviews to pull in data from across the whole of the market at the same time.

”The rationale here is that it makes us much more predictable in what we’re looking for and enables us to see the big picture all at once to understand whether there are broad and really important issues we should be concentrating on.

“Clearly this approach is somewhat different from the old FSA approach of inspecting individual firms one by one and it has the great benefit to you of allowing the markets to respond before there is any widespread call for enforcement action or redress. It certainly shouldn’t pose difficulties for the firms that are already operating to the highest standards.”

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There are 10 comments at the moment, we would love to hear your opinion too.

  1. At least we didn’t have to wait to long before some-one at the FCA, came out and told Mr Tyrie to go boil his head !!!

    I think the just again highlights the pure arrogance and ignorance of top level FCA staff

  2. brian weatherley 8th October 2013 at 11:57 am

    “good data is the precursor of good regulation”

    With all due respect that is simply a sound bite; tosh

    If it so important why did the FSA not institute processes to gather good data before stumbling into RDR ?

  3. Message to Mr. John Griffith-Jones. Come and visit us. We will show you how useless, meaningless and time wasting your data collection is. Being one of the firms selected for their latest thematic review into the RDR, we have just looked at the questions with disbelief. Like Section K in Gabriel (which we have now been fined for not completing) it is totally meaningless. From the “Platforms and investment division” which I note does not have advice or protection in it, it asks ridiculous questions which cannot be answered. It presupposes that you operate to a specific model, gives no guidelines as to how you should complete the survey and you end up making huge assumptions. Product, product, product. Box ticking imbeciles, arrogant and ignoring constructive criticism they are using their power to bully and intimidate firms. And that forces firms to provide any data for a peaceful life.
    For once and for all Mr. John Griffith-Jones, we give advice and where the fee comes from does not indicate in which area the predominant advice was given. We advise on RIPs and non-RIP products, sometimes we do not intermediate. Please get that into your head.
    Pragmatic my backside.

  4. @Sam – my recent experiwnce of the FCA appears to. e the same as yours from the same department, an attempt at bullying and intimidation and when you stand on your principles and refuse to be bullied or intimidated it goes all quite for a week or two. Just waiting for their next respond as so far not even an acknowledgement of our complaint or to escape doe our FOI request which their “no comment” supposed open and frank debate over consumer rights and responsibilities resulted in. All on the record as they were informed and acknowledge that we would record every word of what was said.

    Will you be refusing to pay your fine Sam? My RMAR is due in a few weeks so this could be fun…..

    Suggest you look up shyster on wikapedia. It is such an appropriate word.

  5. Will not pay until guidance is given so that we are able to complete section K. 1.5 hours speaking with FCC was a waste of time. They did not get it. It has gone quiet. So detached from the everyday reality of some IFAs.
    We had one client who wanted protection advice as well as investment, mortgage and retirement advice and given the u/w issues it took ages. Complex, the total bill was £8K. Quite happy to pay commission available on protection plans and paid a cheque for the balance. How the hell you record that given you have to split by Life & Pensions, Investment, pure protection, RIP, non-RIP etc. no-one knows. If he had paid by adviser charge on his investment was all that work in relation to investment?
    It is – well use your own words.
    We have invoiced Aviva for messing us around – the FCA are next. If they can invoice us we can invoice them. Surely???

  6. @ Sam

    If you invoice them, you are in fact invoicing us for their incompetence ? Even if they did, or were forced to pay your invoice I don’t think they would care a bit ? they have no pockets for holes to be burned into them.

    On a side issue I do whole heartedly agree with you and Phillip, I have just had my RMAR land on desk.

  7. Yes I am aware that I would be invoicing everyone else! But that is no different from those who inaccurately complete a FSCS Fee Tarif form and other returns which are so complicated. What I would like to see is it deducted from bonuses paid to FCA staff and in particular the Directors. The Retail Risk Review of the FCA would expect bonuses linked to performance – just as ours is expected to be!

  8. Griffith-Jones ~ Pragmatic (cobblers).

    Tyrie ~ Mindless (ignored).

    Advisers ~ Further evidence of the FSA’s prejudicial agenda to destroy small IFA businesses (struggling to keep their heads above water).

    Sants ~ The FSA doesn’t have a prejudicial agenda against small IFA’s (did anyone at all believe him?).

    McDermott ~ We don’t want to burden small firms with compliance (so why don’t you stop doing exactly that?).

    APFA ~ Should be establishing with the FSA just what it wants with all this data (other than to over-burden IFA’s with compliance) and of what practical value any of it’s actually been to date. Then, APFA should design and present the FSA with an alternative, vastly streamlined version of these hated GOBSHITE returns with a view to meeting the FSA at least somewhere halfway. The trouble is ~ what does APFA do that’s of any practical value to anyone?

    That’s about the picture, isn’t it?

  9. I’ve been in this industry for 23 years and nothing has stayed the same for any length of time. Now we have RDR and Section K. True, the data may be convoluted and apparently of little use, the help on its completion from the FCA is poor, and advisers are just sick of collecting data just for the sake of it. However, advisers advise clients and business owners/directors have to be pre-occupied with accurate data and revenue details must surely be at the top of that list!

    I think Sam’s dilemma with the 8K case sums up the issues but really just requires good software and an understanding of normal business accounting (which I know you are OK with Sam!). The invoice to the client shows say 4 items:

    Work to arrange the protection plans (nothing to do with Section K and shouldn’t end up there!)
    Work to set up pensions (Section B and Section K)
    Work to set up investments (Section B and Section K)
    Taxation Advice (Non Reg income)

    You then receive monies in from commissions, perhaps initial fees, client cheques etc which are allocated to this fee. The source of these monies does not effect what you have invoiced and has absolutely no effect anywhere in the normal accounts. The software can track the source for Section K input.

    I am just about to do my RMAR and all the figures are available and accurate with just one click on our software. Completing this RMAR takes about 15-30 mins, then I can get back to advising my clients!

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