Changes to the retail mediation activities return, including moving to an annual reporting structure for section K, will come into force in December.
Since 30 June 2013, advisers have had to complete new sections K and L when completing RMAR returns, 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.
In March the FCA consulted on changes to the RMAR, which included moving to an annual rather than six-monthly reporting structure for section K and allowing firms to complete section K on either a cash or accruals accounting basis. The rest of the RMAR will still need to be reported every six months.
The FCA also proposed removing section L, which relates to consultancy charging.
In a policy statement published today, the FCA confirmed it will go ahead with the changes, which will take effect from 31 December.
The regulator has also announced a further change to the RMAR: it will no longer require firms to separately report whether adviser charges were facilitated by a product provider or platform.
The FCA says: “We received some suggestions around how the data collection could be further simplified. A number of respondents said the requirement to separately report whether adviser charges were facilitated by a product provider or platform service provider was particularly onerous.
”Having considered our use of this data, we concluded that the marginal benefits of collecting this breakdown were outweighed by the time and money that firms would save if we stopped it. As such, we have adopted this suggestion so that firms will only be required to report a breakdown of adviser charges by those paid (a) directly by client and (b) those facilitated by a product or platform service provider.”
The consultation paper said the changes to sections K and L will halve the annual reporting cost of advisers from £2.6m to £1.3m.
In today’s paper, the FCA says it recognises the changes may not halve costs for every firm, but it is confident most firms will see some reduction, and remains of the view that costs across the industry will halve.
Money Marketing revealed in September adviser trade and professional bodies were pushing for an urgent review of the RMAR after firms raised repeated concerns over the amount of work involved.
In November the FCA issued a technical note on section K of the RMAR and admitted it had failed to provide firms with enough support on completing the returns. But trade bodies said while the additional guidance was welcome, a full review and more significant changes – including a move to an annual reporting structure – were still needed.