The Association of Professional Financial Advisers has called on the Financial Conduct Authority not to adopt Mifid II proposals it argued are disproportionate.
In its response to the FCA’s third consultation on the rules – which come into effect in January 2018 – Apfa said the regulator should bare in mind its attempts to make financial advice more accessible.
In particular, Apfa urged the FCA not to gold-plate the implementation of Mifid II’s telephone recording requirements.
The Financial Conduct Authority is looking at whether to force all financial advisers to record some of their telephone calls as part of its work to introduce new European rules.
Chris Hannant, the trade body’s director general, said the necessity of a suitability report ensures there is a clear and unambiguous record of what is recommended to clients already.
He said: ‘The taping measures are intended to combat market abuse and make sense in the context of trading conditions, where timing is crucial to the outcome and you need to know who said what and when.
“The proposals are disproportionate in an advisory context.
“The existing rules already require adequate records to be kept for giving investment advice.
“Esma’s guidance indicates that a written record is sufficient for a face-to-face meeting under Mifid II. I can’t see how a telephone call is any different. The FCA needs to adopt a proportionate approach.”
The regulator has had a taping policy in place since 2009 which does not include advisers, but has reviewed this as part of its work to introduce the new Mifid II rules.
Now the regulator has proposed applying a taping regime to all article three firms - including financial advice firms.
But the FCA has said it “remains open” to considering an alternative approach, particularly for smaller firms, if it achieves a similar level of consumer protection at a lower cost.
Under the Mifid II rules firms will also have to retain recordings for five years, as opposed to six months under the FCA’s regime.
