In its consultation paper on Integrated Regulatory Reporting, released today, the FSA suggests making mandatory the current voluntary questions on adviser’s retail mediation activities returns about how much commission has been clawed back by providers.
The FSA says the information is a “good indicator of potential churning or misselling and we need it from all relevant firms in order to obtain the full benefits from the information”.
The paper also reveals RMAR changes to help provide better data about market segmentation that could be used by consumers.
In future RMARs will require advisers to state whether they are independent, whole of market, work on the basis of a fair analysis of the market, multi-tie or single-tied.
IFA Promotion chief executive David Elms, who has been lobbying for changes to clear up consumer confusion, says this does not go far enough.
Elms wanted a further segmentation of the independent category of adviser to indicate whether they are remunerated purely by up-front fees or fee offset, or that they are paid by commission and fee.
Elms says: “This does little to solve consumer confusion surrounding what a fee means in the eyes of the consumer. A much clearer definition is needed.”
The FSA says the overall changes to the RMARs and complaint returns will save firms time, with the volume of information required cut by 30 per cent and 80 per cent respectively.
FSA head of regulatory reporting Jeremy Heales says: “These returns, particularly the RMAR, are one of the major supervisory tools for small firms, and therefore impact the vast majority of firms that the FSA regulates. The proposals fit with our broader aim of making it easier for firms, especially small firms, to do business with us as well as reducing the regulatory burden on firms where we can. In addition to simplifying the RMAR, we are also providing further guidance and help to make it easier for firms to complete this return.
“Although these proposals would reduce the amount of data we collect from firms, it would still provide us with the information to help us ensure that firms meet the standards we expect, including treating their customers fairly.”