FCA told to publish reports about advice unit

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FCA told to publish reports about advice unit

The adviser trade body has called for greater transparency surrounding the Financial Conduct Authority's advice unit, warning of a "wasted opportunity" to share knowledge which could be relevant for the wider industry.   

In its response to the regulator's consultation on the impact of the Retail Distribution Review and the Financial Advice Market Review, the Personal Investment Management & Financial Advice Association asked that "detailed guidance" from the FCA's advice unit be shared with the wider market and not solely participants of the scheme. 

The FCA's advice unit provides regulatory feedback and guidance to companies developing automated advice models, including those operating in the mortgage, investment, pension and protection sectors. 

The FCA provides detailed regulatory feedback on an individual basis to firms part of the advice unit project and also publishes resources for all firms developing automated advice models in the wider market, based on its experiences within the exclusive working groups. 

But Pimfa has warned these general publications released to the wider market have not contained anything of "practical use", despite the regulator's work being "highly relevant regardless of eligibility for participation [in the advice unit]". 

The trade body stated: "We would question the level of transparency of the FCA's advice unit and would welcome assurance that all firms are able to operate on a level playing field.

"It is unclear to us whether or not the vast majority of firms that do not use it have benefited from its guidance on proposed services or business models."

Pimfa said whilst it was "largely supportive" of the advice unit's remit and purpose, it raised concerns that a lack of wider transparency risked skewing competition "unfairly" and created a "wasted opportunity" to "share knowledge which is actionable for the rest of the industry". 

In a statement on the regulator's website, last updated in August 2017, the FCA stated it would develop further tools and resources informed by its experiences in the advice unit to promote effective competition and ensure the wider industry benefitted. 

The statement specified this could include guidance, scenario testing and a guide on the authorisations process for firms looking to deliver automated advice. 

Responding to the FCA's call for input, Pimfa suggested the advice unit adopt a similar strategy to that of the Financial Ombudsman Service in publishing anonymised reports to offer wider guidance to the advice industry.

Pimfa stated: "Going forward, we consider that it would be useful to have access to reports which are in effect similar to Fos publications whereby Fos uses anonymised cases to explain to other firms why a decision was taken and where regulatory lines were drawn."