Regulation  

FCA fee hike and stubborn platforms: This week in news

FCA fee hike and stubborn platforms: This week in news

Once again the regulator dominated the week’s news agenda, sticking with its original levy calculations and publishing a paper on industry communication methods, much to the consternation of advisers.

Of course, as ever, there were other things going on outside of the Financial Conduct Authority, which we will now cover off in the traditional round-up.

1. Fee hike angers advisers.

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On Tuesday (23 June), the City watchdog confirmed its planned 10.2 per cent fee hike for advisers for 2015 to 2016 and defended the methods it uses to calculate their contribution to its annual costs as “fair and proportionate”.

Firms in the A13 block - those who do not hold client money - will pay £74.9m over this next 12 months, up from £68m during the last period.

Unsurprisingly this raised the heckles of many in the industry, with Garry Heath, director general of new adviser body Libertatem, telling FTAdviser that the only way to tackle this is to make the FCA more accountable.

Not to be outdone by this new body, the Association of Professional Financial Advisers set out its lobbying priorities for the next parliamentary year in an open letter to advisers, which highlighted a “fundamental mismatch” between a government and regulatory bodies deemed unable to control their budgets.

2. Communication is key.

A few days later, the regulator tried to bury bad news with the publication of both a discussion paper and a report on the effectiveness of both it and the industry’s consumer communications.

The FCA’s discussion paper challenged firms to consider innovative ways of engaging on products and services, proposing videos, infographics or other new approaches to present information clearly and understandably.

The accompanying report produced by Oxera also urged providers to display things in pounds and pence, rather than percentages, along with other suggestions for improving pension wake-up packs and adviser disclosure documents.

Food for thought and another opportunity for you to tell the FCA what you think (the deadline for your thoughts is 25 September).

3. Investigation sees the light of day.

Many hours of tireless work by our news editor culminated in revelations this week that a regulated friendly society is being investigated by the West Yorkshire and Humber regional fraud team in connection with money laundering allegations regarding pension investments.

The Cornerstone Friendly Society, to which transfers were blocked by Liberty Sipp and another self-invested pension firm last year amid concerns over alleged pension liberation activity, is already in the process of being liquidated.

FTAdviser was first contacted about the business around a year ago, when several Sipp providers blocked transfers, and it appears that some investors may have been introduced to Cornerstone via an unauthorised adviser who described himself as a ‘wealth protection specialist’.

The case continues...

4. Platforms stubborn on asset options.

We’ve covered it before and chances are we’ll cover it again, but the issue of adviser access to investments like exchange traded funds and investment trusts on three of the biggest platforms, raised its ugly head once again.