Part 2: FCA’s ongoing advice services review: next steps for wealth managers

What happened?

In part two of TCC’s ongoing advice webinar series, Garry Evans, Gary Maude, and David Boyhan unpack the critical next steps for wealth managers following the FCA’s review findings.

The FCA requires a retrospective review of client records dating back to January 2018. Firms must categorize their clients into three distinct buckets: those who received a review, those who declined or did not engage, and those who were not offered a review.

Why does it matter?

The core compliance challenge is proving that a review took place. For completed reviews, the minimum evidence required on file is updated KYC and an ongoing suitability report letter.

For clients who declined or did not engage, firms must produce chasers or invitations, as a lack of contact logs will place clients in the ‘not offered’ category, raising significant regulatory and redress risks.

Who is affected?

Wealth management groups, financial advisers, and compliance networks managing ongoing fee-charging advice services.

Key risks

• Insufficient evidence on file to prove that ongoing reviews occurred, risking regulatory action.
• Relying on practice management system data rather than direct, qualitative evidence.
• Fragmented record-keeping across older, paper-based, or legacy IT systems.

Actions to take

1. Map your clients into the three FCA buckets for each annual service period back to 2018.
2. Verify that every completed review contains updated KYC and a suitability report letter.
3. Locate and document invitations or chasers sent to non-responsive or declining clients.
4. Incorporate ongoing advice data into senior management MI, conduct risk assessments, and Board challenges.

Wider implications

Firms are struggling to mine legacy data, meaning that some reviews cannot be easily verified. This has direct implications for professional indemnity (PI) insurance and potential redress liabilities if adviser non-compliance is uncovered.

Recommendations

Wealth management groups must design robust, defensible disengagement protocols and leverage expert compliance advisory to handle retrospective file reviews systematically.