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FSA launches adviser charging thematic review

FSA Sky Angular 480

The FSA has kick-started a thematic review into how advisers are disclosing the cost and nature of their advice services post-RDR.

The regulator sent out a questionnaire to 50 firms this week looking at adviser charging and scope of service. Firms are being asked to detail when charges and services are disclosed to clients and to provide copies of disclosure material.

The firms have been chosen to reflect large, medium and small firms, and those which are operating as wholly independent, wholly restricted or running a hybrid model.

From the original 50 firms assessed, 20 firms will then be subject to a more detailed review involving an FSA visit and client file assessments. File assessments will focus on disclosure rather than suitability of advice.

The review will be carried out over three six-month cycles. At the end of the initial cycle, the FSA will publish good and poor practice examples.

The second cycle will run between June and December and the third cycle will run in the first half of 2014.

Speaking to Money Marketing, FSA technical specialist Rory Percival says: “The first cycle is about providing a supportive approach to the industry. Clearly by the time we get to cycles two and three we will have set out our expectations more clearly with examples of good and poor practice and so will expect firms to be embedding the right practices by that stage.”

The FSA is carrying out separate thematic reviews into professionalism and non-advised sales.

Clearwater Financial Planning managing director Duncan Carter says: “We were already operating on an adviser charging basis ahead of the RDR, so we are not really worried about the prospect of the regulator knocking on our door. There may be concerns though among more transactional firms.”


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