The FCA’s final guidance on inducements should be a “wake up call” to the industry and is a “second warning” to firms, says the regulator.
FCA director of supervision Clive Adamson says firms can expect tough regulatory action if they fail to comply with the rules given they have now been “warned twice”.
The FCA published final guidance on inducements in January which banned “extravagant” provider hospitality to advisers. The regulator first published initial guidance on distribution deals between providers and advisers in September.
Speaking at the FCA’s Canary Wharf offices last night, Adamson said: “The reason we published new guidance was because we felt partly there was not sufficient clarity, and the industry had asked us for more clarity.
“It was also because we felt that in some cases the spirit of what we intended had not been adhered to. So we are saying to the industry this is a bit of a wake up call: adhere to both the spirit and the law of what we mean by inducements.”
He said the FCA will check whether firms are complying with the rules through its existing supervisory procedures, and not through any separate processes.
He said: “We are not going to do vast inspections of the industry on this. We expect firms to comply.
“If we come across instances where they are not, having been warned now in effect twice, it is likely we are going to be tougher when we find instances where we do not think firms have complied.”