In its numerous publications prior to the implementation of Consumer Duty, the FCA promised that it would be more proactive and take a forward looking view, rather than acting with the benefit of hindsight – something for which it has received criticism previously.
We’ve been waiting to see how this would pan out and didn’t have to wait long!
One of ATEB’s firms recently received an unsolicited email from an FCA Supervisor which included a request to provide a great deal of information. We expect to see more of this as CD becomes the norm.
The firm was asked to provide the following:
- A copy of the firm’s organogram including staff positions within the Firm
- A copy of the firm’s new business register in relation to all business conducted over the period between 25 July 2021 – 25 July 2023. This should clearly differentiate between business submitted by the firm and any of its appointed representative(s) which should be clearly identified. Please provide this in Excel format and include the following information (as a minimum).
- The client’s name (initials are sufficient)
- The name of the adviser
- Details of where the business had been introduced, or referred from (e.g., name of any introducer firm) if applicable
- Whether the sale was conducted on an advised, execution only or insistent client basis
- Details of the product effected
- The investment amount, or premium payable (including frequency of payment)
- Whether the business is replacement business, a pension transfer or pension switch and the ceding scheme/source of the funds in all cases (where appropriate)
- Full details of the underlying investments for ‘all’ business to be documented. (This should include the full name of the investment and whether it is a standard or non-standard investment)
- In relation to any SIPP, SSAS or (Q)ROPS business written:
- the SIPP operator (or SSAS/(Q)ROP administrator) the business was submitted to
- confirmation of whether advice has been provided on:
- the SIPP/SSAS/(Q)ROPS,
- full details of the underlying investment made into the SIPP/SSAS/QROPS. This should include the full name of the investment and whether it is a standard or non-standard investment.
- Details of the adviser charges
Please note the register should include all transactions where advice was provided as well as ‘new’ products, e.g., when a client was advised to switch their product provider/platform and/or the underlying investment solution.
- A copy of all introducer agreements (if applicable).
- Please confirm whether you have a Centralised Investment Proposition. If you do, please provide the following:
- Details of the portfolios and funds within the CIP.
- Outline the governance arrangements in place to provide ongoing oversight of the CIP (e.g., an investment committee). Who is included in the investment committee / decision makers.
- Dates and brief reason for the removal or addition of any fund/fund managers from the CIP in the last 12 months.
- Minutes from the last 12 months meetings covering each fund.
- Provide details of the compliance monitoring arrangements that are in place including:
- Copies of all internal and external compliance/audit reports that have been produced, and actions taken in response to those reports in the last two years.
- A copy of the firm’s complaints registers for the period 24 July 2021 – 24 July 2023.
- A copy of senior management function (SMF) statements of responsibilities (SoR).
- A copy of the firm’s latest PII policy and proposal form. Please explain what additional capital you are holding in relation to any exclusions imposed on your PI cover.
- Details of the firm’s adviser charges (Initial charge and Ongoing Service charge).
And finally… An explanation of how you intend to meet our new Consumer Duty.
The firm was provided with two weeks to collate all the information and send it to the FCA and by good fortune we had performed an audit just a couple of months previously.
This approach is becoming more commonplace and isn’t unusual, so if your firm receives one of these emails could you provide everything requested?