There is something rather intimidating about getting an email out of the blue from the FCA, what with all its powers, its threats to name and shame and its commitment to pursuing enforcement action. Be afraid, be very afraid...
“I am writing to you as the FCA have been informed that the following Retail Investment Adviser (RIA) registered to your firm has failed to renew their Statement of Professional Standing within 60 days of the anniversary of issue.
“Please review what action you must take below and provide a response to the incoming email address [within 10 working days].
“What action you must take:
1. Please explain why the adviser mentioned above failed to renew the SPS at the appointed time.
2. Please review any retail investment business that may have been transacted by the RIA while they did not hold a valid SPS and report back your findings.
3. Additionally, please also provide details of the systems and controls your firm has in place to ensure that all RIAs renew their SPS in line with the rules.”
Our reputation and regulatory standing should not be tarnished by the CII’s inadequaciesIn fairness, my reply did not take long to write. The adviser had renewed his SPS at the appointed time. Therefore, the review of and report on his retail investment business was not necessary.
Be that as it may, it eludes me why we must provide details of our systems and controls to ensure that all our advisers renew their SPSs in line with the rules when the regulator and the SPS provider have problems with their own systems and controls.
To receive this email – which assumes advisers are to blame for not renewing and that firms are to blame for not noticing and allowing advice in breach of FCA rules – when the blame lies fairly and squarely with the CII is unacceptable.
Indeed, our reputation and regulatory standing should not be tarnished by their own inadequacies. They will no doubt exercise a right to reply, saying this is one case in 20,000. Frankly, that is not good enough. We have to get it right; so should they.
So, where is the email that the FCA sent to the CII asking for a report of their findings regarding why they wasted our time and the FCA’s by falsely reporting that this person did not have an SPS? Let us see evidence of the systems and controls the CII has in place to ensure they follow FCA rules, too. A correction and apology from the FCA and CII would be nice – professional, even.
Gill Cardy is network development director of ValidPath
