Firms could have to change their practices to avoid getting caught out by the regulator's ongoing advice probe, according to Bruce Ely-Johnston, chief commercial officer of AdviceBridge.
Ely-Johnston said firms may have to work harder to justify fees for ongoing advice.
In February, the Financial Conduct Authority announced it had written to 20 of the biggest advice firms asking for information about their ongoing advice services on the back of the consumer duty.
Ely-Johnston said: "In particular, it asks firms how many clients paid for ongoing advice but whose fee was refunded because the review did not happen.
"This is a big task to have recorded for many, many firms and an even more arduous task to go back over all client files to check they have happened, and if not, whether clients have been reimbursed. And what you are going to do about it."
It is expected the regulator could issue fines if it discovers some of the clients being charged fees have not received good or any service.
Last week Quilter revealed it was one of the firms being looked into adding it could "lead to remedial costs".
While at the end of February, St James's Place said it has set aside a provision of £426mn for potential client refunds to address ongoing advice issues, after it saw an uptick in complaints.
Ely-Johnston asked whether firms would be able to cope with the task of proving the value of ongoing advice fees.
He added: "Adoption of monitoring and reporting systems will be paramount and on the agenda of any firm that has any concerns over providing this evidence, as we have seen by recent announcements. And I’d expect to see many more.
"Demonstrating that firms are dealing with every client, monitoring the plan on a regular basis and ensuring that advice remains suitable, can be carried out automatically using hybrid advice systems.
"Systems that can produce reports automatically and interact with clients, alerting advisers to any changes that are required will prove invaluable.
"If your current system can’t do this then maybe it’s time for a review."
tara.o'connor@ft.com
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