FCA’s Dear CEO letter to financial advisers identifies the following key harm risks on which it will focus its supervisory strategy:
- consumers receiving advice that is not suitable for their needs and objectives: FCA plans a further review on Assessing Suitability, to focus on initial and ongoing advice to consumers on taking an income in retirement. FCA wants to assess consumer outcomes in the light of the pension freedom reforms. It will also focus on defined benefit transfer advice;
- pensions and investment scams harming consumers;
- firms holding appropriate and adequate financial resources and PII cover;
- redress not being paid where FOS awards are not honoured or firms are unable to pay compensation; and
- excessive fees and charges.
It also notes firms should review past approvals of financial promotions for mini-bonds in the light of the new restrictions on their marketing, and take appropriate action if the approval would no longer be compliant. Finally, it urges firms to ensure its senior managers understand what the SMCR requires of them, and to understand the impact of Brexit on their business.