The FCA has said it will make it harder for firms advising on high-risk investments to become authorised with the regulator as it plans to place tougher oversight on them.
In its business plan for the year ahead, released this morning, the regulator placed long term savings and pensions as one of its seven core focus area.
Within this, the FCA said work was in place to target high-risk and complex investments.
The plan reads: “In 2018/19 we will carry out a programme of work to tackle incidences of consumers entering into high-risk investments which are unsuitable for their needs.
“This work will enable us to identify where there are problems with high-risk investments. We will also strengthen our authorisations gateway and supervision for firms that provide advice on high-risk and complex investments. This will ensure they improve their disclosure and reduce the risks of harm to retail investors.”
The regulator says it is also continuing to review the effectiveness of robo-advice models as it plans to review whether or not the Financial Advice Market Review achieved its objectives of widening access to advice next year.
Director of strategy and competition Christopher Woolard tells Money Marketing: “This is a bit of a stock take of what’s been bread and better in the Advice Unit. We now have sufficient volume and scale step back look at best practice.”
In his introduction to the report, chief executive Andrew Bailey references the regulator’s continuing fears over defined benefit pension transfer advice in particular.
He writes: “In the past year, we have been extremely concerned about some
firms exploiting consumers’ lack of knowledge of pension products when advising them to transfer out of defined benefit schemes. We have recently published new rules on pension transfer advice. These rules aim to improve the quality of pension transfer advice to help consumers make informed decisions for their individual circumstances.”
The FCA is also mulling whether to extend the powers of independence governance committees to strengthen their ability to call pension schemes to account over value for money.