Advisers Warned of Complacency Amid FCA’s New Consumer Duty of Care Policy
The UK’s financial regulator, the Financial Conduct Authority (FCA), has published its new proposals, which outline its new expectations for the standard of care that firms provide towards customers. These proposals include a warning to advisers to guard against complacency regarding their duty of care for their clients.
The Regulator’s New Policy
The FCA has made it clear that, recently, it has become increasingly concerned that firms have been offering services and information that are difficult to understand at best or misleading at worst. According to the regulator, the number of services on offer that don’t represent fair value for money has increased recently.
In the new policy, the FCA has stated that firms should ask themselves whether they would be happy if they were treated the same way consumers have been. It also said that such companies should question whether they would recommend such services to friends and family should the roles be reversed.
What this Means for Advisers
These new duty of care regulations mean that financial advisers must be wary of falling short of the mark regarding their products and services. While most firms will see these new regulations and think that they are already up to the standard, it is still essential for them not to become complacent, according to experts.
While most would agree that there is generally a good standard of care in the industry, there are always examples of times when clients have not received the correct advice for their problems. Some of these cases have also been widely publicised. It is, therefore, critical for the industry to guard against such issues to protect its reputation as a whole.
Most in the industry would agree with this point. There has, however, been some suggestion that the FCA should provide greater clarity. Some have stated that the policy from the regulator contradicts itself in places, so the FCA should release more details about where to draw the line.
Compliance with regulations is becoming an increasingly difficult thing to do for many FCA authorised firms. The rules the regulator imposes on companies are constantly changing, making it difficult for some firms to keep up. Companies like Scott Robert offer straightforward advice to organisations to help them stay in line with FCA regulations and develop strategies that help them thrive amidst increasingly complex rules. Expert advice is increasingly a necessity for many FCA registered firms.
Overall, the FCA is attempting to protect consumers with its new policies. There can be a problem in the industry where firms offer complex information to their customer bases which may mislead their decision making. While this is not an industry-wide problem, it is nonetheless essential for firms to work cautiously to ensure that they do not slip into these problematic practices. However, the problem persists that the FCA is continually convoluting the rules that firms have to follow, making it difficult for companies to work within the guidelines at all times.