Business Plan 2024/25
One of the FCA’s four areas of focus is ‘Protecting customers’, this includes embedding the Consumer Duty and progressing the Advice Guidance Boundary Review.
Thematic review of Retirement Income Advice (TR24/1)
The FCA’s findings on how the retirement income advice market is working and whether consumers are receiving appropriate advice on meeting their income needs in retirement. It provides examples of good practice, and poor practice including aspects relevant to vulnerability and Consumer Duty.
The Consumer Duty Alliance and the Financial Vulnerability Taskforce will be engaging with the regulator about how we can help provide support in areas identified where firms could do better.
The FCA genuinely welcomes feedback and input from members across the Alliance and our ongoing engagement has expanded to a range of supervisory and consultation areas, including ongoing service charges, fair value and the Advice Boundary.
Members' concerns around the pace of change, the impact regarding data requests and the different dynamics between small and large firms were discussed recently and the FCA confirms that they do recognise this and will apply proportionality.
Wider FCA engagement with small firms
The FCA is keen to additionally engage with advisers, paraplanners, support staff directly and we're coordinating with them on a number of regional engagement meetings so that they can hear from you directly. A big 'Thank you' to Alliance Affiliates; ThreeSixty Services, SimplyBiz, LIBF and NextGen Planners for increasing the options.
Claims Management Targeting
Recent media coverage following SJP’s pro-active decision to put aside more than £420m for possible compensation of service fees, has brought with it a significant increase in claims management company (CMC) activity and promotions…. but not just aimed at SJP!
Evidence
We have advised the FCA that some promotions are designed to motivate complaints by inferring compensation can be achieved for anyone who has received financial advice since 2013. Alerted to a potentially wider issue of an all-out claims frenzy for compensation of annual servicing fees, FCA actively encourages whistle blowing of any poor CMC practice to be reported.
CMCs do perform a valuable service for consumers genuinely impacted but bad practice by a minority risk tarring all CMCs with the same brush. From a consumer’s perspective, it creates doubt and impacts trust, which is counter to a core objective of Consumer Duty.
The FCA agrees and, as they’re also responsible for regulating CMCs, invite Alliance members to provide evidence of these misleading or poorly targeted adverts. Please use this form to do so.
Making supervision more transparent
The FCA is also aware that small firms may not be very familiar with their approach to supervision so are keen to highlight information currently available, for example:
Similarly, if you’ve got a question for the FCA or want to understand why they’re adopting a particular approach, tell us. Please use the Alliance contact form, select “FCA question” from the type of enquiry list and put your question in the Enquiry box. We’ll collate the questions regularly, put them to the FCA ahead of our meetings and let you know the outcome.
Working with Affiliate Members
We’ve also been working with a number of Affiliates, such as the London Institute of Banking and Finance (LIBF) and SIFA, and are pleased to announce a couple of new developments:
United in Promoting the Profession as a Career!
The FCA's latest adviser statistics, covering the past 18 months, validate growing concerns of a potential advice-crunch to meet the ongoing needs of existing clients, let alone address the advice-gap for new clients.
Advice firm consolidation is evident and the age profile of advisers has shifted up the age bands, with one in two advisers now aged 50+ and over half of that population well into their 60s.
The statistics also show another stark reality: the sector has seen few new advisers enter the profession, as advisers aged under 30 have reduced by 59 per cent compared to two years ago.
More needs to be done to attract new talent to a career in the profession as the great work of the sector's academies alone cannot bridge the emerging void.
The Consumer Duty Alliance is developing a New Talent Alliance Forum to collectively work on strategies that will attract new blood to the profession, create good practice sharing and augment the role of academies and the various routes to a professional career in personal finance.
As succession planning through consolidation vehicles is showing some signs of slowing, we are seeing a revived interest in succession to develop the next generation within the same firm and the Alliance aims to offer support to small firms via the New Talent Alliance.
The new forum will be chaired by Tom Hegarty, with LIBF acting as Secretariat. Key academies, trainers, recruiters and all three sector qualification bodies (CISI, CII and LIBF) form a Steering Group. The first Steering Group meeting is scheduled for 9 April 2024 and is an opportunity to discuss the forum’s objectives, strategies, and action plans for the future.
All stakeholders' involvement will be welcome, whether or not you’re currently planning to recruit. If you’ve got experience of successfully attracting and developing talent, we’d welcome your input – more details soon.
Legal profession show support for updated FVT Charter
Earlier this year, we announced an updated version of the popular Financial Vulnerability Taskforce (FVT) Charter that’s more appropriate for the legal and accountancy professions, as well as personal finance.
And the legal profession is already starting to embrace the new charter. SIFA, a service that connects financial advisers with solicitors and other legal professionals, is promoting the charter to all its members and encouraging them to support it.
It’s great to have this proactive support and endorsement from such a respected organisation!
So, lots of good news and I’d like to close by drawing your attention to a couple of new initiatives, more information below:
Very best wishes,
Keith Richards, CEO, Consumer Duty Alliance and Chairman, Financial Vulnerability Taskforce
