Reflecting the year just past and looking ahead, I wrote that the FCA would become increasingly strident about firms who failed to take note of their market reviews, consider FCA guidance in the light of their own practice, and where something was not meeting the required standards, do something to make it right.
Just last week I noted that the FCA was now categorical that firms should read their Risk Outlook and consider its implications for their businesses. Their original early assessments of how firms were coping with the (then) new RDR regulations was gentle, a little prod towards observed failings and indications of what was expected.
But there was a clear steer that there would be two further rounds of work which would be increasingly demanding, and where failings were still observed increasingly intolerant.
Whether you approved of any or all (or none) of the RDR changes, the simple fact is that the rules have been made. It is inconceivable that having spent over six years bringing RDR into being the FCA would lock the drawers on that particular filing cabinet, archive all the meeting notes, re-deploy staff onto ‘the next big thing’ and let us carry on as if nothing had happened.
Many firms spent considerable amounts of time and money on training, qualifications, business strategy and restructuring. Some firms, not prepared to go through the rigours, decided to close and their principals retired.
For these firms it would be galling, to say the least, if the FCA did not pursue advisers who had not met the required examination standards, or if it did not make sure that firms - whether independent or restricted - were describing their services accurately.
For the regulator to fail to enforce its rules would be the ultimate unfairness for all those who, whether enthusiastically or grudgingly, happily or despairingly, decided to continue advising clients and do what was necessary to comply with the new rules.
Frankly, telling clients what you charge, firstly generically and then specifically, was never the most complicated part of RDR and never got the attention that the independent or restricted debate garnered.
Telling clients what you charge, firstly generically and then specifically, was never the most complicated part of RDRThat the FCA is making an example of two firms who will be taken to enforcement over these failures is a clear signal: get it right, and the sooner the better. By the time the third review is published their patience will be completely exhausted.
