Summary
What this article covers in 30 seconds
- The FCA’s thematic work focused on whether reviews were taking place.
- Firms still need to demonstrate advice suitability.
- Some firms provide ongoing advice to up to 90% of clients.
- No-change reviews after 12 months may be higher risk.
- Recordsure technology can notify advisers where evidence is missing.
Recordsure’s Chief Product and Commercial Officer Garry Evans catches up with TCC’s regulatory expert and Technical Director David Boyhan to discuss the FCA’s release of its findings into its recent ongoing advice review. David specialises in wealth management and helps unpack what firms should know about the latest FCA publications regarding ongoing advice services.
In the third instalment of the five-part mini-series, Garry asks David how firms should consider the suitability and quality of their advice in relation to the review findings.
Advice quality in ongoing reviews
Garry notes that much of the FCA’s focus over the past 12 months appears to have been on delivery of the service rather than the quality of the advice that firms give. David says this is a crucial question because the FCA’s thematic work focused on whether reviews were taking place. It was not a deep dive into the quality of the ongoing service.
From a Consumer Duty and FCA perspective, firms still need to demonstrate the suitability of advice. Historically, review models have focused on new business, but David says the FCA has rightly pointed out that firms have moved to a model of providing ongoing advice for up to 90% of clients. It is crucial that firms assess the quality of advice provided through the ongoing review service.
David suggests a risk-based approach. Clients receiving a no-change review, where after 12 months everything is identical to the last 12 months, may be slightly higher risk and may need more emphasis. Whatever firms do, they need a controlled environment that takes account of the quality of ongoing advice as well as whether the service is delivered.
Frequently asked questions
Garry Evans speaks with David Boyhan, TCC’s Technical Director and a regulatory expert who specialises in wealth management.
He says it focused on whether reviews were taking place, rather than a deep dive into the quality of the ongoing service.
From a Consumer Duty and FCA perspective, firms still need to demonstrate the suitability of advice.
He says no-change reviews after 12 months, where everything is identical to the previous period, may be slightly higher risk.