The Financial Conduct Authority has written to 20 of the largest financial adviser firms requesting information about their delivery of ongoing services to clients.
In the letter, it laid out its concerns that clients continue to be charged after advice has been given.
The regulator asked firms if they have assessed their ongoing services in response to the introduction of the Consumer Duty, and whether they have made any changes as a result.
It also requested data on the number of clients who are due a review of the ongoing suitability of the advice as part of the service, how many received that review, and how many paid for ongoing advice but whose fee was refunded as the suitability review did not happen.
The FCA is collecting this information to assess what, if any, further regulatory work it may undertake in this area. It said it anticipates providing a further update having considered the firms’ responses.
Around 20 of the largest advice firms are receiving the survey so the widest possible understanding of market practice is achieved.
The regulator emphasised that their selection is not based on any particular concerns with those firms.
The FCA had indicated it would undertake some cross-firm work in this area in a letter sent in December 2022.
The letter set out its concerns that advice firms were not adequately considering the relevance, nature and costs of these ongoing services for all their clients.
A further letter sent in January 2023 explained how advice firms should approach the incoming Consumer Duty.
It reminded firms that they must act in “good faith” towards customers, avoid causing them foreseeable harm, and enable and support them to pursue their financial objectives.
In a Consumer Duty webinar with firms in December 2023, the FCA flagged concerns that it appeared some consumers may be paying for a service, such as an annual review, but were not receiving it.
In 2021, the FCA published a strategy to “support a thriving consumer investment market”.
The data gathering announced today (15 February) on ongoing services forms part of that work to raise standards so people can “invest with confidence”.
Central to that strategy is ensuring people can access advice if they want it and have trust in the services on offer.
