Advisers should embrace the Financial Conduct Authority’s retirement income advice review, but the challenge will be how to evidence that good advice has been given, according to this week’s podcast guests.
Appearing on the latest FTAdviser podcast, Tom McPhail, director of public affairs at the Lang Cat, said the challenge for advisers will be that it is not enough to just do a good job anymore: advisers also need to evidence that they are doing a good job.
McPhail said: “You've got to be able to show how everything stacks up. For example, that you've looked at the value chain, you can show how your processes work, and that you can show you're delivering good outcomes for your customers.
“Now, that might just sound like ‘obviously we do that already’ and it's common sense, but I just think that's the kind of thing the FCA is going to be looking for here.”
In January, the FCA announced it would review the level of advice consumers are receiving from IFAs on meeting their income needs in retirement.
The regulator said it will start contacting firms shortly as part of the review, in which it will also engage with trade bodies.
It has said it intends to publish its findings in the fourth quarter of this year.
Also appearing on the podcast, Toby Bentley, a financial adviser at Lathe & Co, said the review would reinforce and embed practices that firms should already be implementing anyway.
Bentley said: “Any review that is client outcome focused should be welcomed.
“Most firms will feel like they're doing this anyway. I think the really important bit will actually be to evidence it.”
He added: “It's not enough to internally feel like you have good practices or even your clients to think that, it's actually being able to evidence - s that they've been able to put down on paper how their processes work and the outcomes that come from them.”
amy.austin@ft.com