Gig Review!

Well, sort of.



OK, this is another Consumer Duty themed article but, following our  attendance at the FCA’s Live and Local events (which we recommend you attend if you haven’t done so already), we thought we’d share our experience and highlight the main points that the regulator appears to be placing specific emphasis upon.

FCA has been running Live & Local events for some years now and most firms will have attended at least one of these. The format remains pretty unchanged, with the presenters covering topical material and articulating the regulator’s findings, observations and concerns.

The events are helpful on several fronts and provide firms with either solace that what they’re already doing is OK, or indicators as to what they need to do to get things right. FCA tends to see a far higher proportion of the former, yet it is the latter, more of than not, who need to attend most!

The slides from the events are widely available and provide nothing significant beyond those ATEB saw last Autumn at PFS events, but as always, it is the comments supplementary to the slide content where things become more interesting. We noted the following:

  • Behavioural bias. FCA still sees advisers asking leading questions to engineer the desired outcome.
  • Wills – firms should not just be asking whether clients have a will, but where/who this is held with – this should be recorded in the KYC information.
  • It would be better if firms referred to helping clients pursue rather than achieve their financial objectives. This is perhaps a new angle, but makes sense in our view. Some long term objectives are effectively work-in-progress.


  • If you use the terms design, influence, create, develop, manage or bespoke – you are a firm that is likely to be a manufacturer. As we’ve noted in some of our recent articles it appears that a high proportion of firms will be captured by this to some degree.
  • But, if you use the terms off the shelf, pre-built, solutions designed by others – you are a more likely to be a distributor.
  • Service/advice propositions include disclosure, KYC, research and due diligence, suitability/recommendation and ongoing service.

Centralised Investment Propositions

  • Still a significant concern for FCA. FG12/16 was mentioned (again) with concerns that some firms are shoehorning clients into CIPs. We produced an article on this recently.
  • Segmentation. Should also include segmentation of ongoing services as it is unlikely that one service fits all. Client circumstances change so it is important that clients are advised as and when to switch off (and on) the ongoing service.

Firms varying permissions

  • Those ceasing to transact mortgage business for example should be informing existing mortgage clients of their intentions. Failure to do so could cause detriment. Firms should consider providing details of other mortgage advisers who could assist.

Price and Value

  • What the FCA means by this is ‘what the client requires at the best available price’. There are eight aspects that offer value: price, functionality, performance, fund choice, flexibility, financial strength, tax benefits and service provider administration standards. 
  • Despite there being plenty of commentary that FCA is trying to become a price regulator they are insistent that this is not the case and FCA will not impose price caps. Their major bugbear is firms recommending features that the client doesn’t need but has to pay for.
  • FCA has no issue with firms charging different clients different amounts as some have more complex needs and will need more of an adviser’s time. 
  • There is no rule regarding percentage charging either, but the FCA want firms to think about this. Whilst clients that take up more time/entail more work can reasonably be charged more, it is not a good outcome for someone to receive the same service and pay more for it just because they have a larger investment portfolio. This is something that we’re finding that lots of firms are struggling to come to terms with.

Client understanding

  • Firms should consider asking clients more questions in certain areas once they have gone over the suitability report to ‘test’ their understanding and record the answers. Any gaps are useful T&C development areas.
  • Firms should establish that clients are happy to communicate via Teams, etc., particularly if they initially signed up for face to face meetings. If the costs of your delivery reduce then should this be reflected in your pricing?
  • Consider breaking down KYC meetings into two or three briefer sessions. Evidence suggests that shorter/snappier meetings are more effective at obtaining more information rather than one lengthy session.
  • Firms may wish to consider preparing short videos for client access (via their website) to cover elements of the advice process. For example, disclosure, what’s involved in gathering KYC, etc.
  • Suitability reports are too long. Recommendations includes a summary sheet for costs and charges and an appendix to include a glossary of terms. The rules state that there are only three actual requirements for a suitability report – client needs and objectives, what is being recommended and why/how it meets these, plus any disadvantages.  If you’ve already written to a client refer back to previous documentation, don’t repeat yourself.
  • Ongoing suitability reports. If nothing has changed this should be a letter rather than a report, again referring back to previous reviews and associated reports.
  • DO NOT ask clients if they are satisfied – it’s pointless and your PI insurer may not be happy. Also, remember that just because a client is happy doesn’t necessarily mean that they got a good outcome!

Management Information

  • Analysis of MI should be built into the firm’s risk management plan. In our experience many firms fail to do this.
  • Having a process for selecting files for checking is very important. Arbitrarily checking £20k ISA files can be a waste of time and FCA expects to see some science involved here, so selecting cases based upon product risk and client vulnerability are important, but also consider adviser risk. Is it a new adviser, or one who has a history of poor file quality. Take a risk-based approach.

FCA was keen to emphasise that it will hold individuals to account where it finds failings.



Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

So there you have it. Over recent months we’ve commented on virtually all aspects of Consumer Duty, but there really should be nothing earth shattering or new here. A lot of the above has been circulating for years now but there are still lots of firms in denial that Consumer Duty is no big deal and that they have little to do to meet FCA’s requirements. This is a mistake in our view and with just over three months left before things go live there isn’t long left to get your ducks in a line.

Action Required By You

This should really be for information for most firms, but in far too instances this doesn’t appear to be the case. We’re aware of some firms that have done nothing more than prepare an Implementation Plan, but have done nothing beyond this. If you haven’t attended one of the Live & Local events we recommend that you do so. It’s not just us saying that Consumer Duty is a big deal.
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About the Author

Lisa has a wide range of skills and knowledge, and a track record of implementing compliance and T&C systems and processes of the highest calibre, covering all aspects of financial services.

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