Financial advisers are delivering suitability reviews in most cases, the regulator has found.
As part of its review into ongoing advice, the Financial Conduct Authority (FCA) uncovered that in 83% of cases, suitability reviews were being delivered by advisers. Some 15% of the time, clients either declined or did not respond to a firm’s offer of a review.
In less than 2% of cases, firms said they did not attempt to deliver a suitability review.
Advisers can charge for ongoing advice and related services and the FCA conducted a review over concerns that they were not always being delivered where offered. It gathered data from 22 of the largest financial firms for its findings.
The regulator has asked all advice firms to review its findings and consider whether they have met regulatory and contractual obligations, and to take steps to remedy this if not.
Rules on ongoing services were introduced over 10 years ago to adapt to changing client needs and expectations, technology and market practices. The FCA intends to review the regulatory approach for these services, which will also be part of its Advice Guidance Boundary Review.
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Simon Walls, interim executive director of markets at the FCA, said: “Ongoing financial advice and support can be a fantastic service and can be important in helping people make the most of their money. Relationships between advisers and customers can last many years and can take different forms.
“In the vast majority of the cases we looked at, firms delivered ongoing advice for their customers. But, in a small number of cases, they haven’t attempted to provide the services they offered and customers are paying for. In those instances, they will need to put that right.
“The FCA will also review the rules on ongoing advice to make sure they remain fit for the future and help as many people as possible to get good support in managing their financial lives.”
