FCA's suitability probe prompted by FAMR concerns

Regulator believes its recommendations may hamper the suitability of advice

clock • 1 min read

The Financial Conduct Authority (FCA) will begin a new round of suitability assessments next month motivated by concerns that the Financial Advice Market Review (FAMR) will affect the way advice is conducted.

The regulator has sent a letter to 700 firms requesting that they submit files for assessment.

Specific areas favoured by the FAMR report that might affect the suitability of advice include the focus on technology and robo-advice and changes to definitions, according to the regulator. 

The 700 firms have been selected at random, although the sample aims to reflect the shape of the market.

Some 500 of the firms will be small, and required to show one file to the regulator, the remaining 200 will be asked to show several files, with the exact number dependent on the size of the firm.

The assessed files will fall into three categories. Non-pensions investment advice, pensions accumulation advice, and retirement income advice.

The FCA announced its plans to conduct a new round of supervision in its annual Business Plan 2016/17 released earlier this month.

 

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