FCA to repeat Covid survey of firms for fourth time

FCA to repeat Covid survey of firms for fourth time
Credit: Hollie Adams/Bloomberg

The Financial Conduct Authority (FCA) is repeating its mandatory survey of regulated firms to understand how their financial positions have changed during the pandemic.

In a statement published on its website last week (March 29) the regulator said it would issue its survey for a fourth time, to help it obtain a more accurate view of firms’ financial resilience as a result of coronavirus.

Firms in the first tranche will receive the survey by email between April 12 and 16. Responses must be submitted within 15 working days of receipt of the survey, according to an email to firms seen by FTAdviser.

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The fourth survey comes after the FCA issued the first phase of its Covid-19 impact survey between June and August last year.

David Ryder, head of proposition at Paradigm Consulting, said: “The Covid-19 Impact Survey has become the FCA’s temperature gauge for assessing the health of firms throughout the pandemic, enabling the regulator to continually monitor the key areas of liquidity/cash availability and needs, recent financial performance, scale of business activity and access to government schemes."

Ryder also warned firms to be vigilant for scam emails: "As highlighted widely by Paradigm previously, there have been instances of email phishing attempts being made using this type of survey as a ‘disguise’, so please be vigilant and ensure that the survey is from or an email address.”

The regulator said it expects to repeat the survey in the future.

Matthew Walne, managing director at Santorini Financial Planning, suggested that the survey could be improved.

Walne commented: “I’m not sure why they don't ask, ‘Since the last survey have you been adversely affected by Covid? If not, you don't need to provide further details.’”

Julian Pruggmayer, principal of Financial Risk Management, said: "Why is the regulator so concerned about the effects of Covid on the financial services sector?

"The effects are nothing like as severe as was the abolition of commission and renewals. This has affected not only the financial services sector but also the public, many of whom can no longer afford advice.

"The public has suffered the effects of Covid for 12 months; we in this industry and our clients have suffered regulatory fee hikes - and rising costs of advice - for eight years and counting."

According to the FCA, the survey has helped it obtain an accurate view of the impact of Covid-19 and supported its work to mitigate risks of harm to consumers, the market and competition within it.

In January the regulator said it had identified 4,000 financial services firms with low financial resilience and at heightened risk of failure at the end of October.

Survey questions to firms have previously included what impact the coronavirus is having on their business model and whether permanent employees have been furloughed.

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