In its annual report and accounts for 2018/19 published yesterday (July 9) the regulator said the register had "undoubtedly" prevented harm to consumers, but acknowledged it also carried risk in the form of out of date data and other inaccuracies.
The City-watchdog said: "We acknowledge that there remain data quality issues within the details of the approximate 750,000 records it holds and that it is necessary to overhaul the register and make it fit for the now larger remit of the FCA."
The regulator has faced growing criticism from the Complaints Commissioner over "seriously inaccurate" entries on its "woefully inaccurate" register, with the FCA recently instructed to compensate 50 per cent of a consumer's losses after they invested in a company wrongly featured on the register.
The ruling commissioner Antony Townsend warned it was not the first time he had dealt with a case showing "inaccurate or misleading" information on the register, upholding a complaint in June 2018 in which a clone firm was able to take advantage of the FCA's service.
In yesterday's report the FCA said it was working to strengthen its method of reporting firm data to "improve the quality and reliability of key pieces of information that consumers and firms rely on".
Over the past 10 months the regulator has proposed a number of changes to its register, including adding a search function in September last year which should allow consumers to find local advisers based on a postcode criteria and a selection of four advice categories - mortgages, pensions, investments and debts.
But the new addition was originally met with concern that unauthorised and clone firms also appeared in the search results, albeit with a warning flagged in red saying "We strongly suggest you avoid dealing with this firm".
The FCA said the search function had been launched on a "beta" basis, meaning it is intended to be adapted in light of user feedback, and today confirmed it still intends to make further improvements to the feature in the coming year.
In March 2019 the regulator published rules to introduce a ‘directory’, intended as a public resource for checking the details of a wider group of people working in financial services, including those certified by firms to provide financial advice.
This is because when the senior managers and certification regime comes in later this year, only senior managers at firms will be listed in what is currently the register.
The FCA said it will launch the directory to the public in phases from March 2020.
Martin Bamford, managing director at Informed Choice, said: "The FCA Register is an essential consumer tool so it’s really important the regulator continues to provide a seamless experience, based on comprehensive and accurate data.
"If data on the register is potentially misleading, this is something the FCA needs to address as a matter of urgency.
"I’ve no doubt that fraudsters and less scrupulous advisers will quickly take advantage of any loopholes created due to data gaps."
rachel.addison@ft.com
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