Whilst the regulator did use this update to send an overall positive message about a sector that has“ engaged positively to achieve the right outcomes for its clients”, it does caveat this by highlighting that there are“ opportunities to raise standards further”.
We strongly recommend you use the data published by FCA to revisit your own submission and benchmark your firm against others. You should also consider how you could evidence the response you gave in your original submission. Specific areas for considerations include:
• Quality of advice for ongoing service – It is notable that the FCA highlights the oversight of ongoing advice( e. g. through file reviews) as an area for improvement( with 19 % of smaller firms doing no checks).
• Vulnerable persons – the figure of 11 % UK adults experiencing financial distress quoted, whilst useful, may provide false reassurance, and the FCA do highlight that vulnerability may still be missed or go unrecorded. This figure should
" This certainly points towards retirement income advice remaining a key priority for the regulator moving forward." be considered in light of your target market, for example where your firm has a higher number of clients in later life decumulation.
• Retirement objectives – retirement is the primary objective for 69 % of all advice firms retail clients, including retirement savings, pensions consolidation, or accessing pensions at or near retirement. This certainly points towards retirement income advice remaining a key priority for the regulator moving forward. Think about how you could articulate what changes or improvements you had made.
• AI adoption – it would seem a majority of firms have adopted AI in some form. Whilst AI can present opportunity, it is important to consider both the benefits and the risks. This should include( 1) understanding how the tool works;( 2) allocating responsibility to a Senior Manager( 3) monitoring outputs; and( 4) data protection.
8 | The Adviser Online