The data for this review was requested by the regulator following its concerns that ongoing advice services may not have always been delivered as they should have been.
While it might feel like the pressure has let up for ongoing advisers, things are actually more complex. It’s important for those offering ongoing advice to show that they’ve been keeping up with annual client reviews since 2018 and have the right evidence to back it up. The FCA said: “Firms should consider our findings and whether they can evidence that they have delivered all the services they were required to deliver, as set out in their contracts or as required by our rules. Consideration should include whether it would be appropriate for them to proactively contact customers to assess if any harm was caused as a result of any identified problems or failings. ”
What next?
It’s an important time to react proactively to the FCA findings and take action where required. Key areas to consider include:
Identify areas for redress
The FCA has strongly indicated that redress should be payable to the 2% of clients for whom no effort was made to conduct their review, with 2018 earmarked as the year for data analysis to date back to.
Disengage relevant clients
The need for redress is less likely if a client repeatedly declines reviews. However, firms should assess if ongoing reviews really do benefit these disengaged clients, identify low-engagement areas, and create a disengagement strategy to avoid harm. They should also determine the appropriate time to disengage and consider refunding any charges.
Assess the quality of advice
The importance of ongoing advice to a wealth management firm’s business model was acknowledged in the regulator’s findings, but it was reiterated that the advice provided should be of sound quality. Firms need to make this a core component of their business assurance model if they’re not doing so already.
The FCA also noted they’ll be looking at how companies have tackled the issues it’s outlined in its findings and will check the steps firms have taken later in the year. So, it’s an important time to ensure suitability reviews are compliant and all the right evidence is ready should the regulator ask for it.
Embrace automated processes
Now it’s opportune for firms to evaluate their practices and explore credible solutions that can enhance the delivery and documentation of their suitability reviews. An effective yet simple approach is to integrate the power of artificial intelligence into your current workflow.
Recordsure AI does this seamlessly. Our automated process checks that key evidentiary documents have been uploaded to your practice management system and run seamlessly in the background – only notifying you when evidence is missing. This then prompts your advisers to follow up on any absent periods of evidence.
Our unique machine learning has been established for 13 years and is rapidly trained to understand your documentation style. Plus, it evolves with you – if your ongoing advice document templates and styles change, Recordsure AI adapts.
Get in touch today to learn how Recordsure AI can help you meet your ongoing advice regulatory requirements.
