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FCA marks suitability of advice as “key priority”in 2019/20

17 April 2019

In its Business Plan for 2019/20 the FCA has highlighted suitability of advice as one of its key areas of focus this year and into 2020.

In the document, the FCA said that while its Assessing Suitability Review, which reported in 2017, found that advice in investments, pension accumulation and retirement income was suitable in 93% of cases, it  remained concerned about two areas where it considered there is a greater risk of consumer harm: defined benefit pension transfer advice and advice on high-risk investments. The Regulator said these areas would “continue to be a priority in our supervision work” and it would also be exploring how it could use “more effective data analysis to identify emerging issues and outlier firms at an earlier stage”.

The FCA said that it would be following up its 2017 Assessing Suitability Review, which “identified areas where firms could do more to ensure they provide customers with suitable advice and clear communications”, with a second review in 2019 and would aim to publish its findings in 2020.

The second review it said would again examine the advice and disclosure firms give to different consumers, across different product types and by different types and sizes of firms.

The review will enable the Regulator to assess how firms have implemented the requirements introduced by the Markets in Financial Instruments Directive, the Packaged Retail and Insurance-based Investment Products and the Insurance Distribution Directive.

This would also provide “an updated baseline against which we can assess ongoing issues within the advice market”, it said.

The FCA also highlighted the Post-implementation review of RDR and FAMR outcomes and the Investment Platforms Market Study as two areas of focus in 2019, alongside a peer-to-peer follow up and contracts for differences intervention.

With regard to the Retail Distribution Review (RDR) and Financial Advice Market Review (FAMR), the Regulator said that this year it would “start to review the impact of these using indicators from a range of data.

“The RDR had far-reaching objectives to raise the quality of advice, increase adviser professionalism and reduce bias in product sales. We published a baseline of success indicators at its outset. FAMR focused on two further themes vital to develop the market for advice and guidance: accessibility and affordability. We aim to publish our findings in 2020.”

Professional Paraplanner Technical Insight Seminars in 2019 as with previous years will feature sessions covering this area – over 700 paraplanners have already secured their places across our 15 UK locations. If you wish to secure a place – please click here.


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