There are times when I do not envy the lot of advisers. The time when the inevitable, presumably heart-sinking feeling sets in when yet another bill for the Financial Services Compensation Scheme comes through is a case in point. Grappling with regulatory returns and compiling the myriad data sets required by the FCA every six months is another.
Some of these processes can be eased by automation. But the frustration lies not with the burden of supplying the requested data per se, but the overwhelmingly sense that nothing is being done with it.
It would be easier for advisers to get on board with filing their Gabriel return if they could see tangible results, or if the data being collected was serving the greater good – faster detection and action against poor advice firms, for example. Unfortunately this does not appear to be the case.
The FCA asks for a lot of information: details on profit and loss, client money, capital adequacy, professional indemnity cover, adviser charging, and the list goes on. The length and breadth of the regulator’s FAQs published on its website on the various sections of the return is testament to just how complex the process is.
And yet, regulatory costs continue to rise, firms continue to dump liabilities on the FSCS, and no one seems to be any wiser as to how to stem the tide, despite the wealth of information the FCA has at its disposal.
As we reported last week, we are about to enter a whole new phase of regulatory reporting with the dawn of Mifid II, and the requirement to record client calls. The FCA has set aside £45m just to cope with the introduction of the Mifid II rules and the pressure that will put on its reporting systems. Is a similar size of spend needed to overhaul Gabriel overall, to ensure both the regulator and firms get more out of the system?
Gabriel’s raison d’etre, indeed its name, is “gathering better regulatory information electronically.” But this process should not be about mere “gathering”, but also analysing, monitoring and generally putting the information to good use. Otherwise what is the point?
There may also be a bigger role here for the professional bodies. They are on the frontline, and should be able to help spot where professional standards are not being met, and outright regulatory breaches.
There is a risk here of advisers being stuck on an endless data feedback loop – with nobody listening to the results.
Natalie Holt is editor of Money Marketing – follow her on Twitter here