The FCA has published its latest review of the RDR and the FAMR and unfortunately it comes with some criticism of the advice sector.
Of most concern to advisers may be the suggestion that IFAs are placing some clients into ongoing arrangements when they could be offered a one-off solution. It was only a few lines in the paper but it has certainly caused some concerns about what it describes as price clustering for both ongoing and upfront advice.
Professional Adviser looks at the six key takeaway points here.
The regulator wants the paper to feed into its 'ongoing' review of consumer investment markets – a call for input which closes on the 15th of December - a rather tight deadline given the FCA has effectively just added another big chapter.
Better news is that it doesn't feel like a massive regulatory intervention is likely rather that the FCA is seeking more solutions to the lack of guidance and to some extent one off advice solutions in the market.
The paper also notes that by 2019, eight percent of the UK public had recently sought out the help of a financial adviser up from six per cent a few years’ previously. It is not all bad news.
But the paper has ruffled feathers because in many ways it strikes to the heart of many advisers’ models.
Also interesting to note how the story translates when covered in the national papers – as a 'warning over automatic advice fees' in the Sunday Times.
In other news, Murphy Wealth CEO Adrian Murphy has recently been appointed as Chair for MND (motor neuron disease) Scotland and he explains his personal motivation here also in PA.
Advisers who use the Parmenion platform which has been put up for sale by Aberdeen Standard Life say they just want it to remain the same.
Sanlam has also put the 52 per cent of Nucleus it owns up for sale. That would disrupt a much larger number of advisers were it be bought and merged. Transact and James Hay are in the running. As always the thought of replatforming would worry advisers.
The Lang Cat has put together an interesting note on the sale.
The PIMFA chief executive Liz Field says that the FCA must accelerate its reform of the FSCS.
It makes five demands which we list below.
HM Treasury to review the drivers of FSCS levy costs and the regulatory perimeter against this.
HM Treasury to review what allows firms to transfer risk onto the FSCS to cause market distortions, including phoenixing, and identify ways of legally limiting firms’ ability to transfer risk onto the FSCS in future.
The FCA to review its supervisory approach against risk assessment of firms adding cost to FSCS and report against this.
The FSCS to review intelligence provision and provide an annual assessment of whether the FCA has acted upon it.
The FCA to review levy construction and consider a risk-based element and how to boost recovery from the original firm or product.