The FCA has found that financial 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, such as arranging transactions or managing a relationship between a retail client and discretionary investment manager.The FCA 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 we 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.The rules on ongoing services were introduced more than a decade ago, during which time consumer needs and expectations, technology, and market practices have continued to change. Going forwards, the FCA will review the regulatory approach for these services.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.’If consumers think they have not received the services set out in their contract, then they can make a complaint to the firm and then the Financial Ombudsman Service. Consumers do not need to use a claims management company.The FCA wants to help the financial advice market develop to enable consumers to access the support they need and has set out significant proposals to achieve this, including as part of the Advice Guidance Boundary Review.Notes to editorsRead more about the ongoing advice review work.Read the FCA’s previous statement on ongoing advice.To help firms deliver ongoing services, the FCA has set out a summary of existing rules and guidance on adviser charging and ongoing services.The FCA is writing to the firms it reviewed with individual feedback.Read more about the Consumer Duty.