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.