FCA cuts back on client communication rules

Laura Miller
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The Financial Conduct Authority (FCA) has announced plans to remove a number of what it said are "ineffective communication requirements" from its handbook for firms.

The move follows a discussion paper on 'Smarter consumer communications', published by the FCA in June, which called on firms to think about how they can improve their communications to help consumers make better decisions about their finances.

At the same time the FCA set out plans to consult to remove a number of disclosure requirements, as part of what it said is its "commitment to create a sustainable regulatory framework".

The FCA is proposing to amend the following rules and guidance:

• The Consumer-friendly principles and practices of financial management
• Short report
• The Initial disclosure document/combined initial disclosure document
• Services and costs disclosure document.

Affecting advisers is the proposal to remove the requirement for firms to produce a Consumer-friendly principles and practices of financial management report.

Also relevant to all firms that offer advice to retail clients or arrange transactions for them in relation to packaged products is the proposal to delete the template for the Services and costs disclosure document.

Christopher Woolard, director of strategy and competition at the FCA, said: "We would like to see firms changing the way they interact with their customers. We have been encouraged to see a number of firms are already doing this.

"Today's announcement reflects our commitment to sustainable regulation and addresses disclosures that are not working for consumers, giving firms the freedom to communicate with their customers in a more flexible and open way."

The consultation will close on 18 December 2015.

In addition, the FCA is now reviewing the feedback received on the Smarter consumer communications discussion paper and will consider whether further changes can be made to improve customer outcomes.

Further reading:

Five million more would pay for advice (if it cost less) - report

Access to advice probe begins with look at robo-advice

FCA to set PPI deadline after detecting 'false claims'

 

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