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RDR/FAMR review to exclude DB transfer concerns

The FCA will exclude the rules around defined benefit pension transfers in its review to assess the effectiveness of the RDR and the Financial Advice Market Review within the industry.

In an update today on its May call for input, the regulator says it will also leave out potential changes on the funding of the Financial Services Compensation Scheme and alterations to award limits for the Financial Ombudsman Service.

The FCA says access to appropriate services, the regulatory perimeter between advice and guidance, consumer engagement, and innovation have emerged as the key areas of the industry’s concern.

The call for input received 57 responses from a variety of trade and consumer bodies and financial services firms.

Have the RDR and FAMR really been a success for the advice market?

The FCA says: “As the feedback we have received broadly supports the proposed scope we outlined in the call for input, we will now proceed with our review in line with that scope.

“It would not be an efficient use of our resources to focus in this review on areas where there are other FCA projects that are either underway, or have recently been completed in these areas.

“Our work will be informed by these other projects, but we don’t want to duplicate work.”

As part of recent work on FOS award limits, the FCA wrote to PI insurers in June following the £200,000 increase on claims which came into effect in April.

The communications were said to explain how high value compensation awards might looked under the new £350,000 limit.

The FOS itself recently consulted on its plans to de-scale its operational output from September however, calling for major changes to its funding future.

FSCS tallies up £11m increase in Sipp claims

Among various projects, the FCA is currently working with the FSCS on its funding concerns which resulted in the introduction of another levy for the industry in January.

The FSCS says it is also having to bolster its staff numbers to meet the increasing amount of complex complaints regarding Sipp and DB transfer cases which stem from poor financial advice.

The FCA says the feedback relating to these issues flagged by responders to the call for input will be rolled into its existing work.

In the meantime, the regulator says it will conduct additional research to build its information on industry and consumer patterns.

Money Marketing first reported FCA executive Alex Roy’s comments on this extra research last week at an Adviser Home/Octopus Investments event.

The head of customer distribution policy said: “There will be another data collection – hopefully small – on data and charging and advice models. We are also doing consumer research.

The FCA’s 24 questions to advisers on RDR and FAMR

“We are hoping there will be regular updates as we go and we are looking to hold more events and talk to more advisers.”

The FCA says a sample of firms will be surveyed between the start of August and the end of September.

It says: “We will also review data we already hold from firm reporting, and from FCA market studies and supervisory work.”

The regulator is also planning “separate qualitative consumer research” to support quantitative data collected in its face-to-face Financial Lives Survey.

The FCA is expected to publish further progress updates during the year, while the final report on the RDR and the FAMR’s impact will be issued in the second half of 2020.

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. So in short then this review is going to be a sham !

    We (the FCA) don’t want any of them negative waves Moriarty.

    Why don’t we just declare the RDR and FMAR a roaring success (add a few things to the to do list) and crack on as normal ……

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