FCA Issue Findings From Third Cycle of Post RDR Thematic Review

The FCA seem to be pleased with the way firms have responded to previous RDR Thematic Reviews and the improvements seen in the disclosure of services and charges. However, not to be complacent, they remain concerned that a significant number of firms are still failing to disclose the total cost of ongoing services in cash terms, or not providing an approximation of how long services may take when quoting hourly rates.

As a school report would say ‘still room for improvement’. 

They also state that ‘When creating and reviewing information explaining services and charges to consumers, there is scope for firms to further consider its prominence, clarity and accessibility (in addition to compliance with the detailed disclosure rules)’. So, is your disclosure clear and transparent, and are all advisers ensuring that clients fully understand your fees and charges?

The research highlighted the importance that customers place on the ongoing service reviews to ensure investments continue to be appropriate for their circumstances. It is essential therefore that you have a robust and deliverable review process.

The Thematic Review paper can be found here and detail on all three reviews to date here.

Be aware that the FCA has no hesitation in sanctioning firms. Recently, following the thematic reviews, one firm that had not sufficiently engaged with the changes that RDR requires was referred to their Enforcement and Financial Crime Division.

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

It is essential that you have fully compliant disclosure documents and processes.

You must have a robust diary system in place to ensure that client reviews are offered and take place. 

To manage the processes, you should have systems and controls in place to monitor useage and adherence with the requirements, including management information that can be used to improve the client experience and outcomes.

Action Required By You

  • Read the Thematic Review paper;
  • Look at the Good and Poor practice examples and reflect on these objectively in relation to your firm;
  • Have a defined, documented and deliverable review process;
  • Assess the effectiveness of your systems and controls to monitor and drive the reviews and client experience; 
  • Ensure you have audited and made changes to your disclosure documentation using the FCA’s Disclosure Assessment document with reference to COBS 6 here ;
  • If in doubt contact your ATEB consultant or ATEB directly here /contact-us/ and we can audit your exiting processes and help design new ones.
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About the Author

Steve is an ATEB Director and has a deep understanding of all matter regulatory, built up over his 30 years + in the industry. With a training background and a technical brain, he overseas numerous complex projects and client implementation work.

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