The Financial Conduct Authority has been unable to address an adviser’s complaint about an inaccurate register entry because doing so could cost up to £100,000.
This was revealed in a complaint submitted to the Complaints Commissioner relating to an issue dating back to 2005.
The FCA has now committed to a review of the way its register is designed to make it more flexible.
When the adviser originally complained to the FSA in 2009, they were told rectifying the matter by amending the register would be too costly but added “guidance notes” to clarify the situation.
The regulator committed to re-examine the issue when the register was redesigned but it did not, and the “guidance notes” explaining the situation were deleted during the redesign.
In a letter from the Complaints Commissioner to the adviser, it is revealed that the FCA’s IT department explored whether changes to the register could be achieved and found a full solution would cost between £50,000 and £100,000 to implement across all entries affected by this issue.
The FCA said that while the proposed change may appear minor, it involved changed to the underlying data in the register which was expensive.
In his letter, complaints commissioner Antony Townsend, said: “The FCA’s decision that the cost of a proper fix to the register – at over £50,000 – was disproportionate is a matter of judgement.
“I do not consider that that decision is clearly unreasonable, but it is a matter of concern that the register is so inflexible that amendments to correct misleading information should be prohibitively expensive.
“Given this, it seems unlikely that the changes you would like to be made to the register will be made until a major overhaul of the system is undertaken.”
The complaint related to an adviser and his wife who were directors of Firm I which was an appointed representative of Firm B until 2004.
In 2005 Firm B was publicly censured by the FSA and in 2009 the adviser became aware that his and his wife’s entries on the register gave the impression they had been directors there and undertook controlled functions, which was incorrect.
The FCA agreed the information was misleading but ruled out changing the register but added the guidance notes and committed to change the register when it was next redesigned.
In 2015 the adviser’s MP wrote to the FCA complaining that the new version of the register continued to display the misleading information, but was told the information was correct and did not merit changing.
At this point it also emerged that the explanatory notes had been removed and the FCA undertook to add new notes.
But the adviser complained that the FCA’s promise of “unspecified explanatory text at an unspecified date” was not good enough.
Mr Townsend ruled that the FCA should pay the adviser £1,500 to acknowledge the failure to review his concerns and the length of time it took to resolve the issue.