Data is important. Produced clearly, accurately and consistently, it allows policymakers to better understand the impact of their decisions upon the people and markets affected. It also enables those within the industry to conduct their own investigations in order to more effectively hold the Government and regulator to account.
This is why, in the wake of the RDR, we have produced our Financial Adviser Market: In Numbers report on an annual basis. The report brings together data to present a snapshot of the adviser market at the end of each year.
Used by both policymakers and the broader financial services sector, the publication provides useful insight into trends and developments in the UK advice market. It helped us see the extent of the decline in adviser numbers post-RDR and highlighted the amount of profit taken out of the industry in 2015 as a result of that year’s sharp increase in Financial Services Compensation Scheme levies.
We usually produce our report in April and have started to collate the data that will tell us the story of 2016. However, this year, for the first time, the FCA originally told us it will not provide us with the relevant data from the Retail Mediation Activities Return. Instead, it will be building upon previous figures published in its data bulletins and will produce this information in May.
We are concerned by this development. The data bulletins produced by the FCA to date have been ad hoc publications on its specific choice of topics over specific time periods.
Figures produced on the retail intermediary sector so far have not been comparable with those we have requested and published in our adviser market report, as the categorisation is different.
Our interest is particularly in the business activities of those firms which conduct financial advice as their main regulated activity. However, the data the FCA has produced so far looks at revenue for different types of business conducted by all retail intermediary firms that undertook these specific activities.
While there is merit in producing data on a particular hot topic issue when stakeholder interest is high, such inconsistent snapshots of the market is not the same thing as having a regular series of key indicators.
It is easy to use statistics to present a misleading picture to suit a particular policy or political agenda, often through simply choosing certain start and end dates to the time period they cover.
The best way to present an unvarnished view of the data is to publish a series where the data points are at regular intervals, such as that the FCA has previously provided us with as at 31 December. This is what the Government statistics service does.
We submitted a Freedom of Information request to the FCA for figures that are consistent and comparable. Since submitting our request, the regulator has agreed to release the data. We welcome this decision and will use the data to shed light upon developments in the size and nature of the UK financial advice market in 2016. Our report will be published in the next few months and shared with policymakers and the wider advice community.
Far from being a niche concern, we believe there is a clear public policy interest in publishing regular data on the advice market. The popularity of our adviser market report with policymakers and others in the industry demonstrates a significant appetite to better understand the impact of regulation in order to hold the FCA and the Government to account.
Caroline Escott is senior policy adviser at Apfa