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FCA sets out rationale behind Gabriel data collection

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The FCA has published a paper to explain why it collects the data it does on advisers after firms called for more transparency at the regulator’s regional events.

The paper explains the FCA’s rationale for collecting information through the Retail Mediation Activities return on its Gabriel system and why it needs the information electronically.

The paper says collecting RMA return data helps the FCA meet two of its operational objectives: protecting consumers and protecting financial markets.

The FCA says: “Regularly collecting information from authorised firms helps us to proactively identify and address risks within individual firms and in markets that may lead to consumer harm. Through our data collection we can also monitor firms’ compliance with regulatory rules efficiently and allocate our resources accordingly. This all supports us in achieving our consumer protection objective.”

The paper also highlights common errors firms make in completing the returns.

It says some firms have been completing their profit and loss with information for the given reporting period only, rather than reporting it on a cumulative basis throughout the financial year.

The paper adds: “A firm’s statement that it has not generated any income from regulated activities suggests to us that the firm holds permissions which it is not using. If a firm reports ‘0’ we may contact it to find out why and discuss its future plans. If we feel the firm will not use its permissions in the future, then the Financial Services and Markets Act gives us the power to remove those permissions.

“We pay particular attention to investment firms reporting that they have not used their permissions during a period of at least 12 months. We will write to firms requesting them to remove their permissions and we will continue to monitor the alerts generated by mortgage and general insurance firms.”

The regulator also says that some firms submit the wrong data on the number of advisers qualified during a given period. Those firms entered the total number of advisers with qualifications, rather than the number that passed during that period.

The FCA says that some protection firms had reported “nil” for Financial Ombudsman Service and Financial Services Compensation Scheme income, despite reporting income in the FCA column and having retail customer permissions.

The paper says: “We have found that some firms have entered £NIL in order to submit the data item as it is no longer possible to leave these fields blank. Firms are reminded that all fields are mandatory and need to be completed with the relevant information.”

The FCA said in October it would publish a guide on how it uses the data advisers submit in regulatory returns. The same month, Money Marketing reported on advisers’ concerns about the lack of clarity over how regulatory returns are used.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. To be honest I’m not that bothered about how they use data to prune permissions and correct silly miss-reporting errors (most of which are down to the stupid way questions are worded). I want to know how the data can be used to prevent wide scale bad advice and why GABRIEL and similar methods of reporting by providers are not being used to catch issues much sooner, before FSCS and FOS need to get involved. All provider should be required to report key events (such as unregulated investments held in regulated products or final salary transfers or any product flagged on a FCA watch list) and determine who was the adviser on the plan at the time. FCA should then be able to collate this data with GABRIEL and target these firms for intervention much earlier.

  2. Consumer protection? Whilst this FCA document explains why they collect the data, it does not explain what it does with the data or give any examples of how the data prevented consumer detriment. Where is the evidence that collecting this data is effective? For example, what data did it collect on the 4 firms whose activities accounted for 73% of the £136 million of SIPP claims that fell on the FSCS this year? These 4 firms transacted thousands of pension transfers under the nose of the regulator. That kind of mass regulatory failure needs to be questioned by the TSC, or better still, discussed in Parliament.

    • Very simple answer James and pardon my language, but it was sweet F A

    • The TSC is probably aware of the issue but has no powers beyond asking a few sticky questions. Should it consider the FCA’s response not to be satisfactory, it can do nothing and, as we all know, officers of the FCA are nothing if not masters of obfuscation.

      As for Parliament, one might reasonably think that our best possible ambassador would be APFA’s chairman Lord Deben (aka John Selwyn Gummer) but, it seems, he’s about as much use as a chocolate teapot. Questions have been asked of the APFA council as to just what JSG actually does but no satisfactory explanation has ever been provided.

    • Absolutely spot on there James !!

      One would have presumed, the red alarm bell would have been ringing so loudly it shook the very foundations of Canary Wharf !!

      The deaf, dumb and blind kid, that is the FCA, sure plays a mean pinball………….twiddling your thumbs has obvious benefits !

  3. DoIlooklikeIwasbornyesterday 6th December 2016 at 3:40 pm

    The FCA should be re-named the BSA. I’ll let you guess what the ‘BS’ stands for.

  4. Julian Stevens 31st May 2017 at 11:39 am

    “Regularly collecting information from authorised firms helps us to proactively identify and address risks within individual firms and in markets that may lead to consumer harm”.

    Sanctimonious twaddle, as proven by the tanker loads of uninsured UCIS liabilities falling on the rest of us by way of the FSCS.

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