On 21 April 2016, the FCA published a speech given by Tracey McDermott, FCA acting Chief Executive, (on 13 April 2016) on the regulation of advice following publication of the FINANCIAL ADVICE MARKET REVIEW (FAMR) recommendations.

Among other things, Ms McDermott announced the timing of a number of FCA initiatives to take forward the FAMR recommendations (see Legal update, FAMR final report):

1. The FCA’s advice unit will be open from May 2016.
   1. The unit, which will support the development of automated advice tools to help provide low cost, high quality advice to mass-market consumers on investments, pensions and protection, will be available to all firms (regardless of size) and will link with the FCA’s work on Project Innovate. Ms McDermott said that the development of the advice unit was an iterative process and explained that the advice unit service will continue to adapt based on the feedback received.
   2. The FCA will share with the industry the lessons learned from its initial experiences of taking firms through the unit, and intends to set out more details in a statement in May 2016.

2. The FCA has started work on the Financial Services Compensation Scheme (FSCS) funding review.
   1. This follows an FAMR recommendation that the review considers how to make the FSCS levy more predictable for advisers, and whether it is possible to design a levy that better reflects what is driving costs for the scheme.
   2. The FCA will engage with the industry on the options put forward in the FAMR final report over summer 2016 through bilateral meetings and an industry working group. This will be followed with a consultation in autumn 2016.

Ms McDermott touched on the retail distribution review (RDR), reiterating that the FAMR recommendations do not signal a reversal of the changes brought about by the RDR.

She explained that the FCA believes that the RDR has had a positive impact on the advice market, and that the “important consumer protections it introduced” should not be rolled back.

Also of interest were Ms McDermott’s comments regarding the suggestion that the Financial Ombudsman Service (FOS) typically sides with the consumer in its processes and adjudications.

She explained that the FAMR did not identify any evidence of consumer bias, and that the FOS in fact only upholds 36% of complaints against financial advisers.

http://bit.ly/1Syhlen