Webinar: RDR Adviser Charges and Service Delivery

The webinar here focuses on the background and findings of the FCA RDR thematic reviews and discusses good practice in disclosure and delivery of services.

The FCA issued results from their first thematic review in July 2103 and their second in March 2014. The second stated that the findings were ‘Unacceptable’ and this was because a number of issues highlighted in July 2013 had not improved. The results of the third review issued in December 2014 showed a good improvement.

Disclosure of Adviser Charges

Key points from the thematic reviews:

  • Disclose ongoing charges in cash terms;
  • If using indicative hourly rates disclose the total estimated number of hours for each service;
  • Avoid wide ranges;
  • Only quote charges you actually use.

The FCA research identified that:

  • Consumers struggle to engage with disclosure documents (a number of design tips and good practice steps were discussed);
  • Consumers value service and are happy to pay for good service;
  • Disclosure documents should ideally be no more than 4 pages.

Ongoing service

You should clearly outline your ongoing service and avoid vagueness.

Service levels should also be tangible. For example, the FCA does not consider “we are available 9-5 so please contact us if you need any help” to be a valid ongoing service.

You should have a diary or scheduling system to ensure that clients receive the ongoing service that they pay for and you should be able to demonstrate delivery.

The FCA see no need to continue with thematic reviews in this area and supervision of RDR will now become business as usual. The FCA did stress that when visiting firms they will review the disclosure documents very carefully and will be looking to ensure that they are clear and compliant. The FCA encourages all firms to use their disclosure assessment tools – see related ATEB article here.

All the FCA thematic review work can be found here.

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 simply reiterates information that has previously been issued and should not come as a surprise.

With regards to ongoing service delivery, ATEB strongly recommends that this information should form part of your ongoing management information i.e. how many reviews are due, have they all been completed?

Furthermore, we recommend that file checkers consider not only new business, but also reviews, as for many firms this is now the bedrock of the business.

Action Required By You

  • Ensure your disclosure documents are clear and compliant and use the FCA disclosure assessment tool to assess standards – ATEB recommends that this be done annually;
  • Consider ways of improving client engagement;
  • Apply any good practice examples in the webinar in ways that work for your firm and clients;
  • ATEB Clients should discuss any issues directly with their nominated consultant;
  • Alternatively contact us here.
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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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