What happened?
In this fourth Q&A instalment, Garry asks David how the Financial Conduct Authority (FCA) ongoing advice review findings relate to the broader framework of the Consumer Duty. David notes that ongoing advice services represent a high-priority area that directly feeds into a firm’s annual Consumer Duty board report.
The regulator plans to actively contact firms to inspect progress on ongoing advice services. Advice businesses must be prepared to supply detailed historical management information (MI) dating back to 2018, including evidence of redress and client outcomes.
Why does it matter?
The FCA is a data-led regulator. This means compliance cannot simply be declared; it must be backed by rigorous, auditable evidence. Ongoing advice records form a critical part of the MI needed to prove that clients receive fair value and that the services paid for are actually delivered.
If the FCA reviews a firm, the firm must show robust processes for analyzing their ongoing advice back-book, identifying gaps, and managing client redress fairly where service delivery has fallen short.
Who is affected?
This regulatory focus affects all financial advice and wealth management firms, pension advisers, and compliance teams responsible for oversight of ongoing fee-based service agreements.
Key risks
- Lack of Auditable Data: Failing to maintain detailed and structured MI dating back to 2018 regarding ongoing service delivery and client outcomes.
- Deficient Board Reporting: Missing critical ongoing advice metrics in the annual Consumer Duty board report.
- Unresolved Legacy Issues: Failing to address or justify unpaid client redress for past service failures before regulatory contact.
Actions to take
- Assemble Historical MI: Gather and audit ongoing service delivery records dating back to 2018 to establish a robust data baseline.
- Review Redress Processes: Assess and document any outstanding client redress actions with clear justifications.
- Update Board Reports: Ensure the annual Consumer Duty board report explicitly addresses ongoing advice quality and value.
Wider implications
The FCA’s focus on ongoing advice indicates a wider shift where regulators use data-led methods to spot industry-wide value discrepancies. Advice firms must transition from passive compliance to active, evidenced monitoring.
Recommendations
Firms should implement automated compliance tools to monitor ongoing advice delivery systematically, ensuring every client paying an ongoing fee receives their scheduled reviews.
Supporting sources
Frequently asked questions
How do ongoing advice reviews relate to the Consumer Duty?
Ongoing advice reviews provide the empirical evidence (MI) needed to prove in the annual board report that clients are receiving fair value and that the advisory services paid for are actually delivered.
What historical data does the FCA expect advice firms to have?
The FCA expects advice firms to have accessible management information and client file data dating back to 2018 to justify fees and prove service delivery.
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