Good news story!

Last week we reported that one of ATEB’s firms had received a monster information request from the FCA. This week we can report on the outcome.


Readers will be aware that the firm in question received an unsolicited request from a supervisor at the FCA to provide a very considerable amount of data and information, including past business registers for the previous two years.

We were unsure where the FCA was heading with this because the firm still retains its DB transfer permissions. Could it be a prelude to another deep dive on DB? Or maybe this was more aligned with Consumer Duty?

We didn’t have to wait long to find out.

Fortunately, this firm is well organised, has robust systems and controls and receives regular audits, so it was able to provide all the information requested by the regulator (we’re aware of plenty that couldn’t) and within a few days of it being submitted, a further email was received.

The supervisor had reviewed the documentation and now wanted commentary on the advice charges levied on six specific cases, along with an explanation of the firm’s business model and how it was able to evidence its sustainability – the FCA clearly know what they’re targeting here. This time a response was required within a week.

The firm prepared its further reply and asked us to review this prior to submission – firms often provide more information than is requested in an attempt to avoid further queries, but it’s usually better to just answer what is asked for rather than elaborating, which can set another hare running. The response was duly issued and was followed by a further email the same day.

This time the supervisor wanted to know about the firm’s marketing strategy and surprise, surprise, the results of the file reviews that ATEB had performed. Specifically, the FCA enquired about files that weren’t necessarily 100% tickety boo. We should highlight here that this firm produces really good files, particularly the KYC element, and the cases that were under scrutiny had all been graded suitable but there were some process or material compliance issues. Had there been some unclear/unsafe/unsuitable grades then this really could have opened a can of worms. It was evident that the supervisor wasn’t unhappy with the responses he’d received so far, but this one needed some care, so again we were asked to review the email content prior to issue.

After a further email requiring clarification of a couple of minor points the firm then received a final response. This time the email said ‘No further action required’. On a Friday afternoon! Good weekend all round.

For all sorts of reasons this scenario could have ended much differently, but it perhaps illustrates that the FCA is holding true to its word – that it will be more intrusive, proactive and quicker to act following the implementation of Consumer Duty – and that firms that aren’t able to evidence good client outcomes may have a problem.

It’s nice to be able to report on a good outcome for a change and we’re delighted for the firm. It may receive further contact from the FCA in future, but this exercise should provide some solace that it stands up well to regulatory scrutiny.

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

This type of request from the FCA is likely to become more commonplace and it’s quite feasible that the regulator will want to have a closer look at firms that it hasn’t had contact with previously. 1300+ have already been approached for information as part of the thematic review of Retirement Income Advice, with some being asked to submit advice files for review. Once the findings are published we expect to see an increase in activity, perhaps on similar lines to that seen with DB pension transfers. Where firms do things well there should be more good news stories like this one, but where they don’t, well that’s where the fun starts.

Action Required By You

If your firm’s policies, procedures, systems and controls are robust then you’re in a good place, but most firms don’t know for sure, which is why external audits are so useful. Our audits are focused on identifying what firms do well. In doing so, what isn’t done well becomes more immediately apparent. If you don’t get an annual audit done it may be something worth considering. You may not necessarily be told all you want to hear, but you will know where attention is required and if you receive one of these information requests it may not be such a daunting prospect. Please contact your ATEB Consultant if you need more information.
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About the Author

Paul has in-depth experience across a wide spectrum, having headed up compliance, T&C, monitoring, oversight and MLRO functions previously. He was also an IFA for some time so can see things from more than one angle.

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