The FCA has emphasised being a data-led regulator for years. For firms, good quality data not only helps meet regulatory requirements but also improves client outcomes and drives business success. And so the time has never been more apt for firms to consider how to collate and use their data effectively.
Ongoing advice reviews
David Boyhan, Technical Director at our sister company TCC – a one-stop compliance solutions provider for financial services and regulated industries – considers why the benefits of having valuable data not only helps firms meet FCA requirements but can assist businesses to serve clients better.
In December, the FCA highlighted the need for firms to enhance the quality of their data concerning Consumer Duty board reports. It stated, “Some firms did not have sufficient data quality to justify conclusions or to give governing bodies adequate assurance that firms are meeting their obligations under the Duty”.
Better customer data will not only help with meeting regulatory expectations but will also benefit your business and customers. With this in mind, let’s explore some of the approaches firms can take to accomplish this.
David Boyhan comments: “With the stronger focus on data-driven regulation, now is the perfect time for firms to rethink how they collect and use data.”
For over two years, ongoing advice reviews have been a much-covered topic in the wealth-management arena, with the FCA requesting information on firms’ ability to report on the number of reviews that have been conducted and missed since 2017.
Many firms found themselves in a bind, struggling to compile this data within the required timeframe. But suppose you have implemented a new business register or client management system that tracks whether a client is subscribed to an ongoing service, the frequency of their review meetings, the scheduled dates for these reviews, the actual dates they occurred, and the dates of any follow-up reviews. In this case, you will find it straightforward to address any inquiries from the FCA.
This treasure trove of data ensures your clients receive consistent reviews, enhancing their experience and boosting your business. Review meetings become golden opportunities to gather critical insights, such as identifying clients with protection or inheritance tax (IHT) needs, ultimately leading to satisfied clients, superior outcomes, and a more lucrative business.
Retirement income advice
Retirement income advice also represents a significant opportunity for firms to leverage enhanced data effectively. For instance, understanding the number of clients in the decumulation phase, those who have undergone cash flow analysis in the past year, and identifying clients at risk of depleting their funds during their lifetime can be highly advantageous.
In its Retirement Income thematic review, the FCA has provided a valuable example of data that can be recorded in a new business register, which may include the client’s attitude to risk (ATR) and capacity for loss (CFL). By documenting the client’s total assets, including their primary residence, firms can swiftly pinpoint clients who currently have or may potentially face an IHT liability. Accessing this data easily will facilitate prioritising client engagement before the IHT changes are implemented in 2027.
‘The benefits of meaningful data go far beyond just regulatory compliance,” adds David Boyhan.
It's time to act
Transforming your processes to enhance your firm’s data, such as refreshing your new business register, may appear daunting initially – yet the benefits are crystal clear.
Seeking external support can be a diligent first step, and the regulatory experts at TCC are ready to help. Backed by TCC’s regulatory expertise, Recordsure has developed AI-driven solutions to address financial services’ challenges with superior speed and accuracy. Recordsure AI is unique conversation and document analytics that captures, reviews and analyses 100% of customer interactions for accelerated compliance management and evidencing.
Get in touch today to find out how we’ve worked with other financial service firms to help enhance their data and evidence outcomes for the long haul.
