The FCA’s new RMAR reporting requirements appear to only be succeeding in creating confusion.
Advisers have been telling us the new forms, which have had to be used for any returns since the end of June, use sloppy terminology, are unclear in what they appear to be asking and are creating a huge amount of extra work for small firms already struggling to keep up with other regulatory demands.
Many have made their feelings clear to the FCA alongside strong representations from the Association of Professional Financial Advisers.
The regulator has yet to respond apart from stating that it is providing help for small firms struggling with the process. Judging by the response from readers this is far from adequate.
Much of the concern has focused on the new adviser charging part of the report, section K, and whether certain figures should be expressed in numerical or monetary terms. Advisers have also complained that the forms do not take into account the different types of charging structure they are now applying.
The situation hasn’t been helped by the fact some back-office systems also appear unclear about what is required and have been unable to support advisers.
Apfa highlights a late change to the requirements, just two months before they came into force, as contributing to the confusion. The new reports introduced over 100 new fields that must be considered when collecting data.
The adviser trade body is now calling for an urgent FCA review into its RMAR reporting, a move this newspaper fully supports.
Of particular concern is the fact that many of these worries were flagged to the regulator as part of the consultation process but nothing appears to have been done about it.
Again, there appears to be far too little thought from those who regulate the sector about the effect of their polices on those they regulate, particularly small firms, and the knock-on effect the extra time struggling with endless red-tape has on advice charges.
Any review must ask tough questions about how useful all of this information actually is to the regulator as well as addressing the profession’s confusion and knock-on concerns about the reliability of the data.
If advisers are in the dark over how to properly fill in these reports, or are having to provide guesstimates, then of what possible use can the data be to the regulator?