The largest financial advice trade body has called on the Financial Conduct Authority to overhaul its register of those who work in the sector, as part of changes being brought in under the senior managers’ regime process.
The Personal Investment Management & Financial Advice Association has said the register is currently “not fit for purpose” and warned some effects of the new rules forcing senior managers to become more accountable for what happens in their firms could be “retrograde”.
Earlier this year the FCA published plans to extend the regime to the whole financial services sector, including advisers, next year.
One consequence is that the register will only list those who are certified or registered as senior managers.
Currently all individuals working in finance who are authorised by the FCA appear on the list with details of their business history.
Ian Cornwall, director of regulation at Pimfa, said the FCA’s register serves an important role in helping prevent fraud.
He said: “The fact that staff employed by firms already subject to senior managers and certification regime (SMCR) such as banks are no longer recorded on the register is seen as a retrograde step.
“We recognise that FCA’s current register is not fit for purpose and we believe the FCA should engage with regulated firms, consumer groups and other interested parties to ascertain what information and functionality would be of assistance to consumers and other stakeholders.
“We recognise that costs will be incurred in establishing and maintaining a proper register. Once it has been determined what specifications a register which is fit for purpose should meet we believe a cost benefit study should be conducted to ensure that the solution is viable.
“The issue of the register should be treated as a separate issue from the implementation of SMCR and should not inhibit progressing SMCR.”
Mr Cornwall said the register already had a number of shortcomings, including the “inadequate” search facility, the use of regulatory jargon and the lack of information on an individual’s qualifications.
Under the regime, anyone who holds a senior management function at an advice firm will need to be approved by the FCA and every senior manager will need to fill out a statement of responsibilities explaining what they are responsible for.
The certification element of the regime will mean staff at firms which carry out some roles will have to be certified by the FCA, but firms will be responsible for this.
The regime had previously applied only to banks, building societies, credit unions and PRA-designated investment firms.
Mr Cornwall added: “SMCR is being extended to a large number of firms, many of them very small. Implementing SMCR will pose significant challenges for firms.
“It would be helpful if the Policy Statement could give some indication as to FCA plans to help firms, particularly smaller firms, meet their obligations.”
damian.fantato@ft.com
