Ongoing advice services and any associated charges have been firmly on the FCA’s radar for over a year, after first being signposted as a cause for concern in the Portfolio Strategy Dear CEO letter to Financial Advisers and Intermediaries in December 2022.

 

The regulator indicated it would be undertaking cross-firm work in this area to address their concerns amidst fears businesses were not ‘adequately considering the relevance, nature and costs of these ongoing services for all their clients’.

The changing landscape under the Consumer Duty

This came to fruition further still just two weeks ago, as the regulator announced it will be collecting information from 20 of the largest advice firms, to gain a clearer understanding of current market practice around ongoing advice services. The survey asks firms to submit data about the number of clients who were due a review as part of their ongoing suitability of advice – and out of that identified pool of customers what amount actually received it. The FCA has asked for data going back to 2017. Beyond this, the FCA is striving for clarity about how many customers went on to receive a refund when their suitability review did not happen.

As the financial service sector enters its eighth month under Consumer Duty regulation, it’s vital that firms are clear in demonstrating how they’re achieving good outcomes and acting in good faith to their customers to avoid causing foreseeable harm – whilst enabling customers to pursue their financial objectives effectively.

An important time to review your processes and back-book

And it’s not only the regulator that has the impact of ongoing service charges firmly in its sights. Claims management companies have already reportedly approached clients and submitted complaints to wealth management firms at the centre of the ongoing service charge exercise. So, time really is of the essence for financial advisers and intermediaries to take stock and assess their practice and approach to ongoing advice services as a priority.

Act now to address the risks

TCC’s subject matter experts are currently working with clients to consider their Consumer Duty approach and have witnessed an inadequate consideration of ongoing service advice and reviews at some firms. That’s why we have the regulatory insight to help you assess any risk your firm may face both now, retrospectively and going forwards – and offer support to fix your potential issues and help ensure your firm has a Consumer Duty compliant process for ongoing advice

Get in touch today and book time with our experts to discuss your ongoing advice services challenges.