Financial advisers’ ongoing services

Ongoing services are a key feature of the retail investment sector, and an area of FCA priority. Advice firms support more than four million clients in how to navigate the complex financial decisions they face. Ongoing services are also central to firm revenue and how businesses are valued. FCA data suggests 90% of new clients are recommended an ongoing service and ongoing adviser charges make up 80% of advice firm revenue.

The FCA has made ongoing services a key priority for the next two years and is examining firms’ approaches through the lens of the Consumer Duty. The regulator’s initial work has focused on whether ongoing services are being carried out as promised and what action firms take when services aren’t delivered. The FCA also plans to send probing data requests to firms so that it can identify high-risk firms for proactive supervision.

It’s therefore essential to review whether your ongoing service proposition stands up to scrutiny. Otherwise, there’s a risk of losing clients to competitors, complaints, regulatory intervention and costly redress bills.

What are the areas I need to consider?

The Consumer Duty has increased the requirements for how initial and ongoing advisory services need to be designed, priced, communicated and delivered. A summary of the key considerations is set out below.

How we can support your business

We can help you evaluate whether the design and implementation of your ongoing review processes meet regulatory expectations. Our range of support options has been designed to provide differing levels of assurance depending on your needs. But they all have the following things in common:

• We focus on the things that really matter: We know the relevant COBS and Consumer Duty requirements inside out and have a deep understanding from our work with clients on how the FCA is applying them. Our reviews focus on the areas that have the greatest impact: service design, fair value, service delivery, suitability, and MI/reporting.
• Our approach is pragmatic and proportionate: We understand how firms work in practiceand knowthat any solution needs to be sustainable commercially, as well as being effective from both a compliance and clientperspective.

Our reviews are carried out by teams with significant industry, consulting, and regulatory experience. We can help you in the following areas:

• Alignment with Regulatory Expectations: Determine if your business is in line with the FCA’s expectations.
• Benchmarking: Compare your practices against industry peers.
• Gap Identification: Identify any potential gaps in your approach.
• Mitigating Risks: Take proactive steps to reduce the risk of regulatory action, consumer complaints, and costly redress exercises.
• Evidence: Document the steps you have taken to monitor your compliance with the Duty.

What do our ongoing service reviews cover?

We offer five types of ongoing service review, depending on the support you need:

• Health check

  Best for those who want a high-level assessment of whether your ongoing service approach contains the policies and procedures needed to meet key regulatory requirements.

  The review provides a gap analysis of your policies, procedures and MI for your ongoing service focused on the following areas:

  • service design
  • fair value
  • communications
  • vulnerable clients
  • review process
  • ongoing suitability
  • refund policy
  • management information
• Design effectiveness

  Best for those who want a review of whether the design of your ongoing service is in line with relevant regulatory requirements.

  The review covers the following aspects of your ongoing service:

  • service design
  • fair value
  • customer journey
  • approach to vulnerable clients
  • ongoing suitability policy
  • ongoing review process
  • refund policy
  • management information

  We’ll also benchmark your approach versus comparable firms.

• Design and operational effectiveness

  Best for those who want a review of whether the design and implementation of your ongoing service approach are in line with relevant regulatory requirements.

  The review covers the following aspects of your ongoing service:

  • service design/approval
  • fair value assessment
  • key client communications
  • approach to vulnerable clients
  • ongoing suitability policy
  • ongoing review process
  • refund policy
  • management information

  We’ll assess a targeted sample of completed client reviews to examine whether processes are being followed.

  We’ll also benchmark your approach versus comparable firms.

• Remediation and rectification

  Best for those who want a review to assess whether clients have received the services they are contracted to receive, and  make recommendations for remediation or rectification in line with regulatory expectations.

  We’ll assess whether client reviews have:

  • been delivered as promised
  • resulted in a suitable recommendation
  • been documented appropriately

  We can also advise on any remediation/redress, as well as improvements to the underlying ongoing review processes

   

• Bespoke

  To scope a review to meet your specific needs. For example, an outsourced compliance and internal audit review focused on specific aspects of the Consumer Duty.

  The review can cover a variety of potential focus areas, including your:

  • ongoing service design
  • fair value assessment
  • key client communications
  • approach to vulnerable clients
  • ongoing review process
  • ongoing suitability policy
  • refund policy
  • management information

  We’ll also benchmark your approach versus comparable firms.

How to get started

Get in touch with our experts below for a more detailed discussion about your needs.