Regulation  

FCA could introduce adviser business plan guide

Advisers may be provided with formal guidance from the regulator on the information it requires on their business plan, following demands from a compliance expert who has claimed intermediary clients are often ‘shocked’ at the level of detail they are being asked for.

The Financial Conduct Authority has admitted it is keeping under review whether it has been clear enough in its explanation of the type of information it requires from advisers. A spokesperson told FTAdviser that it “might produce something for firms if needed in the future.”

Ian Stott, client services director of The Consulting Consortium, had said the regulator is demanding advisers produce detailed business plans during review meetings and faced the prospect of being deemed “higher risk” if they could not meet the high bar set by the FCA.

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A spokesperson for the FCA had responded that the questioning was part of the new approach following the bifurcation of the Financial Services Authority, with assessments looking at business models designed to “help us come to a view about the extent to which the firm embeds fair treatment of customers and integrity in the way it is run.”

Mr Stott said the FCA should produce a guide to what information it expects firms to be able to produce rather than shocking advisers with requests of this nature.

A spokesman for the FCA responded that the regulator would normally advise firms to contact us via the contact centre if they are unsure of what we expect of them. The spokesperson added the regulator does keep this kind of thing under review and “might produce something for firms if needed in the future.”

Mr Stott warned the FCA is increasingly asking firms to show and talk through their business plans in conversations that go beyond the Gabriel reporting requirements - and that often catch advisers off-guard.

He said: “The Gabriel reporting has been extended to provide a lot more granular detail in terms of what firms are doing to be prepared to meet the challenges of FCA regulation.

“We have had a few conversations with the FCA supervisory teams around what are their expectations. Having spoken to some client firms who have been visited already they were astonished by the level of detail that was being requested.

“It has all been a bit left-field for those that have not been suitably prepared. They [the FCA] want to know how you are going to attract new clients, what is your target market, what are the demographics of that target market, etc.”