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FCA to reveal how it uses Gabriel data

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The FCA is set to publish a guide on how it uses the data advisers submit in regulatory returns.

In its monthly round-up ,published yesterday, the regulator says after speaking to advisers at its Live and Local engagement events, it found firms wanted to know more about how the FCA uses the data they provide to its Gabriel reporting system.

The regulator has also updated its online Gabriel training package, and will point out some common reporting errors firms make.

FCA director of policy David Geale says: “We received and continue to draw valuable insights from this engagement. Firms are interested in getting a better understanding of what we do with the data we collect and why we need it [and] there isn’t always awareness of some of the resources that are available to help firms with their submissions.

“Following feedback, we will soon publish an overview of why we collect Retail Mediation Activities data.

“We will outline the rationale for collecting the data, why we need it in an electronic format, and how it feeds into our wider supervisory approach. It will also draw attention to some common RMA misreporting errors that firms should avoid.”

Last week, Money Marketing reported on advisers’ concerns about the lack of clarity over how regulatory returns are used.

A former supervision team member at the FCA has since defended the system to Money Marketing.

They say: “I used the data when I was there, like on retirement planning and A-Day, to help inform what was going on in the market and start a strategy for supervision.

“Selecting firms for supervision work, you could look at the ratio of supervisors to advisers to indicate where there might be supervisory weaknesses, so sometimes the regulator can use the data intelligently.”

Separately, the FCA has also set out guidance on firm’s use of communications. The regulator says it will investigate instances where firms have given “unhelpful” disclosures or risk warnings to consumers.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. It is not simple data like supervisor ratios that causes the problem. Or complaints. Or financials. When the FCA trawls through the returns to get some idea of client costs it assumes everyone works in the same way, provides data in a consistent manner and charges in the same way. So when the FCA says their data does not support adviser’s argument re costs it is frankly and justifiably met with some cynicism. For example, we charge hourly rates but nowhere do we reveal what the rates are for different individuals, who did the work, what rate they charged the client so it was appropriate for the task involved, and the number of hours charged. And nowhere can you judge the complexity of the case to weight the figures to compare apples with apples. Put another way, I shudder at our right off rates which means that in fact our clients rarely get charged anywhere near our headline rates.
    It is hourly charging IFAs which I would suggest have greatest issues with GABRIEL but then I guess we are in a minority and can go and jump! (FCA – I am going to Dudley……)

  2. Some examples of how the FCA has actually identified, homed in on and put a stop to dodgy practices before losses arising from, for example, UCIS failures drive a firm into default and end up being dumped onto the rest of us by way of the FSCS might be useful. I rather suspect that it has none it can cite.

    Were the returns system designed in a practical and useful manner, approaching motorway pile-ups of this type could well have been avoided. But it’s already too late ~ as a result of the FSA/FCA’s FAILURE to act, the damage has been done and it’s likely to be years and years before our FSCS levies return to remotely reasonable levels. Reform of the funding of the FSCS may be on the FAMR agenda but it’s all waaay too late. The regulator FAILED in its statutory obligation to prevent this state of affairs from developing in the first place.

    In the meantime, Mark Neale’s contribution to the FAMR debate has been to claim that the funding of the FSCS is “working fairly well” (i.e. pay up or pack up) and to call for the compensation ceiling to be abolished. Great input, Mr Neale, really positive. Not.

  3. My suggestion would be to abandon Gabriel reports for all small firms. Instead, small firms should complete a short annual questionnaire (covering compliance matters, eg the number of complaints, and mix of business, including higher risk products) and submit it along with the firm’s accounts within three months of the accounts being finalised. The current system is crazy.

  4. Nicholas Pleasure 21st October 2016 at 10:57 am

    The FCA will explain that they use this data for operational purposes and leave it at that. After all, they are not answerable to anyone and especially not to advisers.

    I 100% support Julian’s comments above. I’d enthusiastically complete my Gabriel return if I thought that the information was used to catch the crooks. It isn’t. It’s just another cost on advisers and a waste of everybody’s time. But, hey, it shows the FCA is doing something for its £1bn a year doesn’t it?

    • Julian doesn’t have to do a Gabriel return as he is a Network member, not DA. I would suggest that instaed of collecting data via firms, they collect the data via PI insurers so that we are giving the same data to the Pi insurers which the FCA ask for instead of different data. You can’t trade without PI, PI looks at the risk of an upheld claim, so why aren’t the questions combined?

  5. I personally welcome this, as may be we will able to have a greater impute as to what we believe will help identify poor practice and firms.

    Julian has identified what most of us have been shouting about for years. Why are these firms not being identified earlier.

    However, there is another danger here that no one is talking about. The fraudsters can use this knowledge to their advantage as they will understand the process. You damned if you do, you damned if a don’t. Funny old world.

  6. I’ve asked in the past what representations APFA has made to the FCA on this issue, for example presenting a format that’s simple, relevant, massively less time consuming/wasting to complete and which would help the FCA do its job properly, i.e. rooting out and swiftly putting a stop to dodgy practices. FFS, that’s what it’s obliged to do by Statute, not least a Statutory Code of Practice which it continues steadfastly to ignore.

    Harry Katz pointed out that when he was DG of AIFA, Chris Cummings made representations to the FSA on this subject but had been completely ignored. So, even if the FCA should come up with a half credible explanation of what it does with all the GABRIEL data, we may surmise that it’s unlikely to be with a view to inviting anything in the way of constructive input from those who have to complete the cursed things as to how they might be improved. Any talk from the FCA about constructive engagement with the regulated community is little more than mendacious hogwash, as are its “consultations”. And, as many of us have pointed out, no body exists with the authority necessary to force the FCA to change its ways, so there can be little prospect of any change. As far as I’m aware, the issue of the GABRIEL Returns isn’t even on the FAMR agenda. It’s all just dancing round the may pole ~ an FCA speciality.

    • But Julian, you don’t have to complete a Gabriel report….I do and in fact I’ve got about 2 weeks to submit my current one. Yes it’s a bit of a pain,I am not sure what they do with the data because as management information, little of it is of real use to me, I use different metrics, but I suspect most firms like mine who are DA have more trouble with our annual PI application than gabriel as the Pi questions asked are different every year so you invariably have to manually identify the data while Gabriel is pretty much automated from our back office systems now.

  7. Just to pick up an a comment made earlier, I agree it would be far simpler to submit a copy of my accounts and a copy of my annual PI proposal as this would confirm financial resources / profits / turnover and the level of “risky” products sold. GABRIEL could then simply collect a bit of soft data on complaints, SPS issuer and advice charging / client numbers.

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