FCA Concludes Ongoing Advice Suitability Review
– What It Means For Consumers

The FCA has highlighted record keeping, clear communication, and effective systems as essentials of good practice. Sufficient resources to ensure service levels were met, plus the ability to identify clients who should no longer pay for ongoing services (due to their inactivity/lack of engagement), were noted.

Examples of poor practice included inadequate record keeping and client contracts that did not fully describe the service they would receive. Ineffective management oversight was also mentioned.

The FCA’s report has concluded that, fortunately, most financial advisers are able to demonstrate good practice with the ongoing service they provide to their clients. It is encouraging to see that 83% delivered suitability reviews as expected. However, in 2% of cases, the FCA found that no attempt had been made to contact the client for a review. The remaining 15% of clients declined or did not respond to their adviser’s review offer.

The FCA said:

“At its heart, a well-delivered ongoing service should be a beneficial and trusted relationship between client and adviser, and one that can last for many years, tailored to the needs of the client.”

The FCA stressed that it was “most concerned” about the 2% of clients who received no suitability review and said that “it is likely redress will be due”. They encourage advisers to look back as far as 2018 and take action if they identify clients who have suffered financial harm.

The FCA has said that it will monitor complaint numbers and firms’ responses. It will also continue to review the rules on ongoing advice “to make sure they remain fit for the future”.

Several advisers were asked to comment on the FCA review findings and agreed that the results were reassuring and that there was no system-wide issue. Ongoing fees make up a significant proportion of advice firms’ income, so it is important that the service is delivered well.

Among those who spoke out was Alastair Walker, Partner at Optimum Path Financial Planning. He said, “the benchmark for what constitutes a review is so low, that it does not really tell us much about the quality of advice they’re receiving”, suggesting that some of those who do receive suitability reviews may not be getting a good quality financial advice service.

Sarah Spruce, Legal Director at TLW Solicitors, said of the FCA’s findings:

“It is reassuring that most financial advisers and planners provide ongoing suitability reviews when they say they will, but it is concerning that some people continue to pay for a service they never receive.

The FCA’s review targeted the country’s biggest firms which, it could be argued, may not have the same focus on customer care as smaller firms, but this is not necessarily true across the board.

Poor service levels can affect anyone, and it is important that clients know where to turn if you think that you may have been charged for a service that you haven’t received. If you or a loved one have been affected, as well as a refund for overcharged fees, you may be entitled to the loss of growth on the funds, as well as interest. Our specialist team can assess your case and see if you are eligible to make a ‘no win, no fee’ claim.

We are already helping clients with their ongoing advice fees claims and are now starting to see successful settlements – many of our clients hadn’t realised quite how much they’d lost.”

The Financial Ombudsman Service (FOS) handles claims regarding poor or lacking ongoing financial advice. FOS was established as an independent body to settle disputes between FCA regulated financial institutions, including financial advisers, and their customers.

In response to the FCA’s concerns, high profile wealth management firm, St James’s Place, has taken steps to prepare for claims relating to ongoing advice fee structures.

Many people find the process of making a claim difficult and time-consuming. TLW Solicitors can assess your case and help you make a ‘no win, no fee’ claim. You may be entitled to compensation for paying annual fees for ongoing advice that was unsuitable or not received. In appropriate cases, you may also be entitled to claim for loss of growth on the funds, plus simple interest at 8%.

Our experienced team will ensure that:

• The correct forms and information are submitted on your behalf
• Your case is proactively progressed, and you are kept up to date at all stages
• You receive the amount of compensation you are rightfully owed
• We consider all avenues of redress