Summary
What this article covers in 30 seconds
- Clients who declined or did not respond to an ongoing advice review offer need a considered review approach.
- David Boyhan says firms need to check data back to January 2018.
- Where clients paid for a service but did not receive ongoing review service, firms may need to consider redress.
- Disengagement processes should account for vulnerability and the number of chases before ending a relationship.
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 us unpack what firms should know about the latest FCA publications regarding ongoing advice services.
In the second instalment of a five-part mini-series, Garry asks David what firms should do about clients who are not engaging with them.
Garry
The 2% of clients that weren’t invited for a review will require some sort of standard remediation and redress approach. But for the 15% of clients that either declined or didn’t respond to the offer of review, what should firms be thinking about doing for them?
David
Yes, that’s a great question Garry. And I think the first thing is to reiterate the point you’ve made there about the 2% of clients who weren’t invited to engage in the process. The FCA has been quite clear that they would expect those clients to be paid some sort of redress.
But in relation to your question about clients who have not been engaging, the first thing that firms need to do is to go back to 2018. The FCA is being very clear that firms need to go back and check their data going back to January 2018. Now firms need to be looking at those clients and seeing whether they’ve been paying for a service and not receiving an ongoing review service. Maybe they haven’t been receiving an annual review meeting for a number of years. And then they might potentially consider paying redress to some of those clients. If there’s been one or two missed reviews, it’s less likely that redress would be required. But firms really need to go back to 2018, see which clients were paying for a service and what sort of service those clients were paying for.
And then obviously if clients aren’t engaging, there needs to be a disengagement process as well. This isn’t as straightforward as some people think it is because you need to take into account areas such as vulnerability and how many chases you’re going to make before you potentially cut a client off. So, I think there’s two things that really need to be done with those cohorts Garry: the first is identifying all the data back to 2018 and then making a decision as to whether or not redress may be payable to some of them.
Garry
Makes a lot of sense, thanks David.
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Frequently asked questions
Ongoing advice clients who declined or did not respond to a review offer need attention, alongside the separate cohort not invited for review.
David Boyhan says firms need to check their data back to January 2018.
Redress may be considered where clients paid for a service and did not receive the ongoing review service they were due.
It should consider vulnerability and how many chases the firm will make before potentially ending the client relationship.