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The FCA is currently in contact with 45 adviser firms looking at what the firms charge for ongoing services. The requests follow findings from their suitability review which found more than 40% of IFAs breached disclosure rules. Expect this sample to be extended!
Although 93% clients were given suitable advice, the review identified 42% didn’t meet disclosure standards.
In order to establish if the failure is widespread the FCA is seeking to better understand the nature, scope and delivery of the 45 firms ongoing services and charges.
The firms selected include both independent and restricted firms.
The work forms part of the regulator’s general supervision of the sector and will be used to decide if further action is needed down the line.
In their suitability review report the FCA said that initial disclosure was the main area it found unacceptable results. It highlighted concerns including where firms did not estimate the length of each service after disclosing an hourly fee structure, and where they used charging structures that had a wide range.
The FCA said when it released the results of the suitability review that it would be part of an “communication programme which will run over the course of 2017 and into 2018” and would share good and bad practice examples as part of this.