Financial Conduct Authority  

FCA crackdown and LEBC staff struggles: the week in news

FCA crackdown and LEBC staff struggles: the week in news

Brexit and so-called ‘Megxit’ both culminated this week as the Duchess and Duke of Sussex moved to Canada and the Withdrawal Bill made it through Parliament to receive royal assent.

Meanwhile ‘exiting’ was also the name of the game closer to home, as PI cover forced 30 advisers to exit the defined benefit market and staff departures led LEBC to hire temps.

It’s time for the week in news. 

1 Temp time

A raft of redundancies and staff walkouts forced LEBC to seek help from external paraplanners, FTAdviser revealed this week.

Kay Ingram, director of public policy at LEBC, said the national advice company had needed to make a number of redundancies, and some staff left of their own accord, when the firm stopped offering DB transfer advice.

This led to a backlog of cases which means it can take LEBC advisers up to two to three months to prepare straightforward advice, an anonymous source told FTAdviser.

2 Very little Moola

Robo-advice firm Moola turned over a mere £900 in the final full year of its operations, losing £1.3m.

Moola is set to close next month but Companies House data showed the company had a meagre turnover of £889, with a cost of sales of £324,000 and expenses of £1m.

It has since emerged adviser Richmond Wealth has contacted Moola with the offer to take on some of the staff and buy some of its assets.

3 FCA crackdown

It appears the City watchdog is readying itself for a fresh crackdown on financial advisers after finding the actions of an increasing number of firms were causing consumer harm.

The FCA sent out a Dear CEO letter identifying ways in which clients of advisers could be financially harmed, warning IFAs it would be carrying out further work on this area.

It urged advisers to ensure the advice provided was suitable, costs and charges were disclosed clearly and they acted in the client’s best interests. The Lang Cat’s Mike Barrett thought this was a sign the FCA was set to renew its scrutiny of Prod compliance.

The letter was one of three sent by the regulator this week. The other two were sent to asset managers and investment firms and warned fund managers were not providing value and that alternative investments were being offered to the wrong consumers respectively.

4 PI problems

Problems obtaining affordable PI cover has forced more than 30 advice firms out the DB transfer market in just the last three months, it emerged this week.

Data from the Personal Finance Society showed more than 30 firms had pulled out the PFS’s pension transfer gold standard as they were no longer operating in the market.

Keith Richards, chief executive of the PFS, said he expected the number of firms leaving this market to increase in the coming months as the Financial Conduct Authority publishes final pension transfer advice rules.

5 SJ-fee

St James’s Place revealed it had no plans to review or shake up its charging structure this week, despite receiving criticism from its latest board member.