Summary
What this article covers in 30 seconds
- The FCA gathered data from 22 advisory firms after raising concerns in February 2024.
- Most clients received reviews, but remediation remains due where reviews were missed.
- Firms should trace ongoing advice MI back to 2018 and test agreements, evidence and fair value.
- Recordsure technology can automate document checks and notify teams when evidence is missing.
In February 2024, the FCA raised concerns about the delivery of ongoing advice services, prompting them to gather data from 22 leading advisory firms.
This data survey aimed to uncover how many clients were scheduled for a review, who actually received it, and the outcomes for those who did not.
This ignited a wave of apprehension throughout the wealth management industry, hinting at the possibility of an impending, broader remediation phase.
Fast forward a year, the regulator has unveiled its insightful findings.
Taking action
The findings state that while the majority of clients did receive their reviews, there’s crucial remediation due for those who didn’t. Additionally, it raises the critical issue of how firms should engage with clients who either didn’t respond or opted out of their ongoing advice review.
Reflect on the past, secure your future
Gathering MI for clients receiving ongoing advice is essential. According to the FCA’s guidance, this should be traced back to 2018.
Firms should revisit their back book to confirm they have the appropriate evidence, reassess client agreements, and verify their fair value assessments for ongoing advice. Moving forward, it’s crucial that firms conduct timely reviews and establish complete processes to pinpoint when these reviews are due – and evidence of the outcomes of the reviews.
Delving into the details
To explore the implications for wealth management firms, Recordsure’s Chief Product and Commercial Officer, Garry Evans, caught up with our sister company, TCC‘s Technical Director, David Boyhan, to unpack the important next steps for firms.
Garry and David address topical issues including:
- What are the key findings from the review?
- What should firms do about disengaged clients?
- How should firms consider the quality and suitability of advice?
- How the review findings relate to the Consumer Duty
- How firms can stay compliant in the future
Firms can enhance their suitability reviews by integrating AI into their workflow. Recordsure technology automates document checks, notifying you only when evidence is missing so advisers can intervene.
Frequently asked questions
The FCA asked 22 advisory firms for data showing how many clients were scheduled for ongoing advice reviews, who received them and what happened where reviews did not take place.
Clients who did not receive reviews need remediation, and firms need a clear approach for clients who did not respond or opted out.
Firms should trace MI for clients receiving ongoing advice back to 2018.
Recordsure technology can automate document checks and notify teams when evidence is missing so advisers can intervene.