Upcoming rules that could change advice landscape

  • Explain key changes in regulation
  • Explain key changes in budget
  • Identify future consultations

The list goes on.  

We don’t know if there will be tools developed, similar to those for ATR (Attitude To Risk), to enable firms to assess ESG preferences in a consistent repeatable manner but there will be change in this area and it will be quite wide ranging in its impact.  

EU 5th Money Laundering Directive

When thinking about regulatory change there is also the ongoing franchise that is the Fifth Money Laundering Directive. 

The FCA updated their “Guide to financial crime for firms” in January and the FCA made it clear that they expect firms to comply, even if not immediately fully so. 

The new regulations brought in tougher rules around beneficial ownership (i.e. more customer due diligence). 

The government has proceeded with the proposed approach for firms to check public registers when entering into a new business relationship, including that the onus should be on the trust or company to provide relevant evidence.  

Closely linking to this will be the results of a technical consultation carried out by HMRC in relation to the Trust Registration Service. 

HMRC will consult on changes to the regulations which will come into UK law during 2020.  

We expect the Joint Money Laundering Steering Group (JMLSG) to publish revised guidance in April 2020.

Defined Benefits Pension Transfers

We cannot ignore the forthcoming attraction that will be the policy statement to CP19/25 which is likely to include a ban on contingent charging for pension transfer advice. 

The publication of the rules has now been pushed back to Q2 and Q3 however at this point minimal changes are anticipated.

Firms will need to revisit their terms of business following the policy statement and this may also mean updating their website and any associated marketing material.  

Professional Indemnity Insurance (PII)

The challenges around PII and particularly in ensuring it is adequate for the activities a firm undertakes have been exacerbated by the concerns in the DB advice market. 

This is making firms consider the potential benefits of operating within a network and this will be a solution for some, especially as the FCA are alert to the possibility of firms “phoenixing”, but networks will not accept liabilities for advice given outside of the network. 

Therefore, firms looking to join should ensure that they have adequate run off cover.

Changes announced in the Budget

The budget seems like a lifetime ago, particularly given the Chancellor has stood up several times since then to announce packages of reforms. 

So it’d be easy to forget that in the Budget there were changes that will impact your clients. 


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