The FCA has written to 20 of the largest financial adviser firms requesting information about their delivery of ongoing services, for which their clients continue to be charged after advice has been given.
In its survey, the FCA asks if firms have assessed their ongoing services in response to the introduction of the Consumer Duty, and whether they have made any changes as a result.
It also asks for data on the number of clients due a review of the ongoing suitability of the advice as part of the service, how many received that review, and how many paid for ongoing advice but whose fee was refunded as the suitability review did not happen.
The FCA said it is collecting this information to assess ‘what, if any, further regulatory work it may undertake in this area’. The FCA anticipates providing a further update having considered the firms’ responses. The regulator further stated that the selection of firms was based on achieving a wide view of the market, ‘not based on any particular concerns with those firms’.
A further letter sent in January 2023 explained how advice firms should approach the incoming Consumer Duty, reminding firms that it requires firms to act in good faith towards customers, avoid causing them foreseeable harm, and enable and support them to pursue their financial objectives.
In a Consumer Duty webinar with firms in December 2023, the FCA flagged concerns that it appeared some consumers may be paying for a service, such as an annual review, but were not receiving it.
In 2021, the FCA published a strategy to support a thriving consumer investment market. The regulator said the data gathering on ongoing services forms part of that work ‘to raise standards so people can invest with confidence. Central to that strategy is ensuring people can access advice if they want it and have trust in the services on offer.’
