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FCA explains decision to roll back on IFA call recording requirements


The FCA has said that part of the reason it rolled back on plans to make IFAs record calls with clients was because it recognised that “telephone is not the main channel for conversations about client orders” for some advisers.

Last month, the FCA announced that it would amend its proposal to require advisers to tape telephone calls under Mifid II legislation, allowing them to make a written note of the conversation instead.

In board minutes from late February, released today, the FCA says that “significant and wideranging responses” to its consultation had led to the regulator’s change of direction.

The minutes read: “It was reported to the board that significant and wideranging responses to the consultation had been received. This was particularly the case in respect of the proposal to extend the taping requirement to retail financial advisers, with many respondents arguing that the proposal was disproportionate and of questionable relevance to the RFA business model.

“Having considered these representations and after further engagement with industry, the team had concluded there was merit in the argument that at least for some RFAs, the telephone is not the main channel for conversations about client orders. Accordingly, it was proposed to allow RFAs to satisfy the requirement stipulated in the directive either by taping or taking a contemporaneous note of relevant conversations.”

The FCA also confirmed it was extending its planned risk warnings for Lifetime Isa sales by adding a further two risks: “one relating to eligibility for means tested state benefits and the other relating to losing the benefit of an employer contribution to a private pension”.

The board was also updated on “work being undertaken in preparation for Brexit, including the first meeting of the joint HM Treasury/FCA Senior Steering Board in January.”

The board minutes note that City Asset Management chief executive Nicholas Coghill and Edentree Investment Management senior fund manager Sue Round have been appointed to the regulator’s Smaller Business Practicioner Panel, one of four bodies which oversee the FCA.

In March, former IFA Association director Clinton Askew stepped aside after six years leading the panel.

The FCA is looking for a new chief information officer, it added. The successful candidate would have executive responsibility, but report into the FCA’s chief operating officer Georgina Philipou.



FCA rolls back on Mifid II client call recording rules

The FCA has amended its proposal to require advisers to tape telephone calls under Mifid II by saying they can also make a written note of the conversation. In a September consultation paper the regulator proposed extending the recording requirement to all “Article 3” firms, which includes financial advice firms and corporate finance boutiques. Under Mifid II, […]


Tom Baigrie: In defence of client call recording

I am a great fan of call recording. My firm was an early adopter, in part because we heard much about the ombudsman’s propensity to give clients the benefit of the doubt in a dispute over who said what to whom. We also recognised the huge training benefits that come from listening to yourself speak. In […]


IFA replaced as head of FCA advisory panel

The IFA who chairs a panel of small businesses advising the FCA has been replaced as the group’s head. Citywide Financial Partners managing director and former IFA Association director Clinton Askew has chaired the FCA’s Smaller Business Practitioner Panel since April 2015 after joining the group in 2009. The panel is one of four statutory […]


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