Financial Conduct Authority  

FCA suitability review pushed to 2021

FCA suitability review pushed to 2021

The Financial Conduct Authority has pushed its suitability review of retirement advice into 2021, with the probe running until the second quarter of next year. 

In a regulatory update published today (May 7) the regulator confirmed its second review of the advice consumers receive around retirement income had been delayed by the current coronavirus pandemic. 

The review is now tentatively set to pick up again between January and March next year, but the FCA has said the process could continue in to the second quarter of 2021. 

The watchdog began quizzing advisers on their retirement income advice records at the beginning of this year, sending information requests to 125 randomly selected advice firms. 

The letters form part of the regulator's fresh crackdown on the advice market and it is understood the regulator will look at the root causes of poor advice throughout the suitability review. 

The details of the delay were confirmed in a regulatory timetable published by the FCA this morning, which listed probes and consultations which had been cancelled or delayed to ease the burden on firms during the coronavirus crisis.

The regulator also confirmed its wider review of the advice market, in which it is evaluating the impact of the Retail Distribution Review and the Financial Advice Market Review, had been delayed by the pandemic.

The RDR review already faced delays before the crisis, but according to this morning's table the FCA hopes to formally begin engaging with firms again in the third and fourth quarter of this year. 

The publication of the regulatory timetable, formally known as the Regulatory Initiatives Grid, was announced by Chancellor Rishi Sunak in the March’ Budget, but was accelerated as a result of the Covid-19 crisis. 

Meanwhile the implementation of rules on platform transfers has been pushed back to February 2021 while a date has yet to be confirmed for the introduction of rules on platform exit fees.

The document also confirmed the FCA's ongoing supervisory action on defined benefit transfers had not been affected by the spread of Covid-19 and would continue during 2020 and into 2021.

Christopher Woolard, interim chief executive of the FCA, said: "At any time it’s important for regulators to do what they can to help firms plan, but it’s all the more vital in difficult times like these.

"That’s why we have brought forward the publication of the grid for the first time.

"Financial services firms need to know what regulatory work is coming down the track, and this grid will give them the opportunity and time to prepare.

"It also shows the need for further careful planning by the Forum members for the autumn."

rachel.mortimer@ft.com 

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.