Financial Advisers

 

In the day-to-day supervision of small financial advisers, we look out for common problems or risks that could prevent firms meeting their regulatory requirements.

These risks are investigated in projects and the results, including good and bad practices seen, are passed on to firms in the most appropriate way (usually the small firms web pages).

The table below summarises which areas we are currently planning to look at in small retail financial advisers during 2006/07.

 
Common problem/risk area What are we looking for? Why are we doing this?
*Indicates follow-up work to an earlier project to see if the improvements we required have been made.   Where relevant, this column summarises the relevant Principles for Business (P) – full definitions can be found in PRIN 2.1.
*Complaints Handling Firms handle complaints appropriately. A firm must treat customers fairly (P6).
*Disclosure documentation Financial advisers provide the appropriate disclosure documentation to customers in an accurate and timely way. A firm must treat customers fairly and provide information to them which is clear, fair and not misleading (P6,7).
Inconsistent standards in dealing with specialist pension drawdown Firms understand the products fully and explain/advise on options clearly to customers. A firm must treat customers fairly and communicate with clients in a way that is clear, fair and not misleading (P6,7).
*Phoenixing Firms do not move assets to another firm without moving liabilities. A firm must conduct its business with integrity and treat customers fairly (P1,6).
Quality of advice Measurable improvements in the quality of financial advice given to customers. A firm must treat customers fairly (P6).
Quality of outsourcing Measurable improvements in the quality of advice given by compliance consultants to financial advisers. The FSA aims to help retail consumers achieve a fair deal.
Review of electronic reporting forms The FSA makes the RMAR, MLAR and complaints returns easier to complete and more focussed. The FSA aims to improve its effectiveness and make it easy for firms to do business with us.
Under capitalised firms Firms have sufficient, and accurately-reported, financial resources. A firm must maintain adequate financial resources (P4).

 

For the outcomes of any of these projects, please check our web pages for financial advisers.