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FCA eyes 40 firms in adviser recruitment and training probe

The FCA is analysing information from 40 firms about their adviser recruitment processes and what quality checks are in place on the advice they give.

Earlier this year, Money Marketing revealed that the FCA sent letters to a sample of firms asking about training, competence and hiring records for staff.

A Freedom of Information Act request now reveals that the FCA targeted 40 firms as part of the work, and is still in the process of analysing the information it collected.

The FCA says it worked with the Financial Ombudsman Service and Financial Services Compensation Scheme to decide which firms to approach.

Firms had two weeks to respond with the required information, the FCA says. While some were provided with an extension due to difficulties, three of the 40 firms missed the deadline, and did not supply the information until they were contacted again by the regulator.

How should advisers attract and train new talent?

The FCA’s response to the FOIA request reads: “We can confirm as part of our ongoing supervision we have contacted a number of financial advice firms to gain a better understanding of their procedures when recruiting advisers and the systems and controls they have in place to monitor and oversee the quality of their advice.

“We identified the firms the FCA would write to through analysis of information and data we would normally rely on for the supervision of firms. This includes, but is not limited to, complaints data, FOS awards and FSCS claims.”

However, the FCA says it is unable to make the information request or the responses received public due to restrictions in the FOIA.

The regulator says: “Our work is ongoing and we have not yet concluded what further work may be needed. Any further work would be fed back and followed up on a firm-specific basis as part of our supervision of these firms.”

Earlier this month, the FCA announced it had worked with the Chartered Insurance Institute on a new exam to give advisers the option of re-evaluating their competence once a year.

Other professional bodies have said they may look to follow suit and provide similar ongoing testing.



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. More pointless job creation prodnosery.

    • I beg to differ. I haven’t often come across a recruitment process that actually does a credit check and ensures that the candidate is solvent – for starters.

      Most firms work on the basis if the candidate can stand unaided and breathe then he may be a prospect. Otherwise they just poach from another firm and are not too fastidious about anything other than production figures and how many clients will come aboard.

      I personally think the review is ‘a good thing’.

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