'How SMCR hit me hard when I sold my firm'

The FCA had issued regulations delegating certification to individual firms – a reasonable decision, considering the pressures on the regulator.

While chancellor Jeremy Hunt has expressed his intention to review the SM&CR regime as part of his 30-point Edinburgh Reforms, there may be a salutary tale in the below. 

Initially, firms needed to ensure individual IFAs in the firm had a sound knowledge of the Conduct Rules, which had been drawn up but more work would need to be done before final certification on 9 December 2020.

Consider this: what if you were an adviser, working for a firm that had previously been your own, and which you sold onto another adviser while you made that considered exit over time?

What if you had intended to retire before SM&CR but had been asked to stay on to help with some complicated client cases - for a fee, of course?

Your livelihood may depend on the whim of the firm at which you work.

What if you put all the client-facing hours in, including having to service clients while the new owners took holiday leave, only to be told in a letter that the new owner no longer intended to certify you under SM&CR, citing the admin burden of certification, and not saying much at all about any of the outstanding client cases?

This happened to me and it was a shock, especially given my long history as a chartered financial planner. 

Clients were calling me and I had to tell them I could no longer advise them after December 9.

I spoke with the FCA on December 2019 to complain. FCA contacted the firm, which apologised for not updating me on the certification prior to November 2019, but said that I wanted to retire anyway.

Moreover, according to the FCA, re-registration would take months, despite the circumstances. I was left unable to earn a livelihood despite having an ultra-high-net-worth client wanting advice from me - the only person he said that he trusted. 

Clients were calling me and I had to tell them I could no longer advise them after December 9.

It seems to me this was a regulatory failure to protect clients - which is the FCA's stated remit.

I made an enquiry to my accrediting body and this got passed to a paralegal who, on a telephone call, admitted he knew nothing about financial services.

I had first raised the issue in February 2021; in June he referred me back to the FCA; I went back to my accrediting body again as I felt that the issue - that advisers could end up at risk - had not been properly understood.

It wasn't until August 2022 that I got a response - and I was told to contact the FCA.

The FCA guidance states that if a firm does not issue a certificate when it could or should, this would generally need to be dealt with via employment law (for an employee) or general contract law (for someone who is self-employed).

Most advisers do not have the time, the money or the energy to fight their corner in court.

So learn from my experience.

Your livelihood may depend on the whim of the firm at which you work, and you may need deep pockets to appeal an arbitrary refusal to certificate you in the courts.

- An anonymous adviser known to FTAdviser