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On 15th February, the FCA published a webpage confirming it had written to around 20 of the largest financial adviser firms requesting information about their delivery of ongoing services, for which their clients continue to be charged after advice has been given.
The context
Ongoing advice is an area the FCA has expressed concern about over the last 12 months or so, particularly from a fair value perspective and especially where customers are paying for an ongoing service or annual review but are not receiving it.
The FCA is collecting this information to assess what, if any, further regulatory work it may undertake in this area. Once it has seen the responses, the FCA says it will provide a further update on its plans.
The survey
The survey asks:
- if firms have assessed their ongoing services in response to the introduction of the Consumer Duty, and whether they have made any changes as a result;
- for data on the number of clients due a review of the ongoing suitability of the advice as part of the service, how many received that review, and how many paid for ongoing advice but whose fee was refunded as the suitability review did not happen.
Our understanding is that the data requested should cover the last 6-7 years, which may present a challenge for firms to gather accurately and in short order. However, this stands as a good example of the proactive and data led approach we expect the FCA will be taking in respect of the Consumer Duty and its supervision more generally, and we can expect many more such approaches to come, particularly for firms in the FCA's Consumer Investments sector.
In 2021, the FCA published a strategy to support a thriving consumer investment market. The data gathering announced today on ongoing services forms part of that work to raise standards so people can invest with confidence. Central to that strategy is ensuring people can access advice if they want it and have trust in the services on offer.
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