The Financial Conduct Authority (FCA) has reported that advisers are delivering suitability reviews in the vast majority of cases included in its review of ongoing advice.
Financial advisers can charge their clients for ongoing advice and related services; the regulator was concerned that these services may not always have been delivered where they had been offered, so asked for data from 22 of the largest financial advice firms. The review focused on delivery of suitability reviews as firms generally included these as part of their ongoing advice service.
The data provided by the firms showed that suitability reviews were delivered in around 83% of cases. In a further 15% of cases the FCA were told that clients either declined or did not respond to the firm’s offer of a review. There were fewer than 2% of cases where firms reported they had made no effort to deliver the suitability review to clients.
The FCA is asking all advice firms to review its findings, and to consider whether they have met their regulatory requirements and contractual obligations regarding ongoing services. If not, they should take appropriate steps to remedy the situation.
Simon Walls, interim executive director of markets at the FCA, said: “Ongoing financial advice and support can be a fantastic service and can be important in helping people make the most of their money. Relationships between advisers and customers can last many years and can take different forms.
“In the vast majority of the cases we looked at, firms delivered ongoing advice for their customers. But, in a small number of cases, they haven’t attempted to provide the services they offered and customers are paying for. In those instances, they will need to put that right.
“The FCA will also review the rules on ongoing advice to make sure they remain fit for the future and help as many people as possible to get good support in managing their financial lives.”