/ Regulation

THE TOP CLASS WEDNESDAY UPDATE WOULD HAVE SETTLED FOR A CARD

I just spotted this, right, and I don’t want to shock anyone but it’s distressingly near Christmas and no-one mentioned anything and now there’s quite a lot to do, so you’d better all get on with it. And by “you” what I mean is “me” so if we could all keep everything on the down-low for the next week or two that would be ideal, aye?

Actually, what I’d really like to do is sack the whole thing off, head somewhere near if not actually North of the Arctic Circle and hole up with books and music and fine things to eat and drink and let everything just pass me by. Who’s with me? None of you. None of you are allowed.

Those of you who have worked in big companies before will know that there is always a December rush to get those objectives finished that you haven’t started yet so you can put them in your little personal development folders and undergo the annual humiliation of trying to prove to your boss – who knows fine well what you’ve bothered to get done and what you haven’t – that you should get a bigger share of the shrinkflated bonus pot than your colleague over there because that’s what the Corporate Hunger Games is all about and may the odds be ever in your favour. All this often leads to a flurry of end-of-year activity and a complete inability to keep things on the down-low and it’s all very unsatisfactory.

Someone who clearly has had a Big List to get down and is now feeling pretty good that their desk is empty and yours is groaning is our regulator, whose PDP folder must now be looking in pretty good shape. Do regulators get bonuses? I don’t know and nor, it turns out, do I care.

After Mike’s poke at the CP widening access to advice last week, this time we’ve got a Dear CEO letter to contend with, a quarterly missive with some Consumer Duty clarifications and a financial promotions CP proposing a gateway for firms who want to approve financial promotions for unauthorised persons. This last one is probably a Good Thing to stop one of the more egregious forms of knavery around advertising iffy products to the unwary, and if the gateway was like the one Bellatrix pushes Sirius through in the 425th Potter film then so much the better.

Briefly, though, let’s dwell on the Dear CEO letter many of you will have received in the last few days. There’s quite a bit in there and frankly this isn’t the place to do it all, so I’ll just pick a few highlights. I will deploy the lang cat’s patented AI regulatory translation tool , CatGPT (beta), to try and help; available in the App Store for only £4683.99 a month, no minimum contract.

“Where consumers experience unsuitable advice, we see this is often driven by individual behaviours, misconduct, lack of integrity, unmanaged conflicts of interest and weak systems and controls that fail to provide adequate oversight.” (my bold)

Translates to:

stop mucking around and stop anyone who works for you mucking around and we want to see how you’re doing that.”

To put it another way, there’s a clear focus here on footpads and vagabonds and that’s great. But the point about weak systems and controls and conflicts is important; as firms try to spread out beyond pure advice into other areas, whether it be DFM permissions, adviser-as-platform or whatever, there are additional responsibilities and the more you start trying to be a big business, the more of this kind of regulatory overhead you can expect.

“When recommending investments, we would not normally expect there to be conflicts of interest where the adviser will receive additional benefit or has a connection with the investment recommended.”

Translates to:

any of you with Broker Fund 3.0 strategy slides can get rid of them right now or else.

Interestingly, I would think that would be a bit of a shot across the bows for any advisers who have plumped for life inside a consolidator where their buyout multiple depends on how much business they put into the in-house CIP, but then again I might be wrong about that.

Here’s my favourite one though:

“We expect the Consumer Duty will be particularly relevant to ongoing services provided by Financial Adviser firms. Firms should also ensure consumers are receiving the appropriate communications regarding their investments, including a suitability report if, after a review of suitability, the recommendation is to maintain or update the current investments…The implementation of the new Consumer Duty will be monitored across all regulated firms. We may undertake further cross firm work to explore this at a sector level and develop interventions if necessary. This may include assessment of whether consumers are paying for ongoing services that do not meet their needs, is not delivered as per the terms of the agreement or is too costly when assessed against the content and quality.”

Translates to:

you’re going to have to earn that 1%, neebs

There’s obviously a serious point here – both through the quarterly publications and letters like this, it’s clear that the direction of travel for firms is higher expectations around not just conduct, but the documentation of that conduct. Whether a Dear CEO is the place for all this, I’m a bit less sure, but one thing’s certain: everyone should make sure to have a good break because 2023 ain’t going to be quiet. It’s the most wonderful time of the year…

SEMI-FESTIVE LINKS

  • Jeremy *unt is coming to Edinburgh for a big bang on Friday. Have as much fun as you like with this one.
  • Our presale for #langcatlive in February finishes on Friday too. I am secretly very pleased with how many folk have already registered, and I’ll be even more pleased when you – yes you – join in. Details here – free for advice professionals, £100 off for everyone else till Friday. Get on it!
  • Tom has Stephen Timms on the podcat this week and it is *well* worth a listen.
  • And your music choice is a fine mix of Mongolian throat singing and good old fashioned metal, tipped to me by one of the less conventional financial planners out there. Thanks Rob. The rest of you: please enjoy Black Thunder Pt. 2 by The Hu and if you don’t enjoy this video then I’m going to have to put you back in The Room for the rest of the day.

See you next week. Only 2 Updates left till Christmas.

Mark

/ Blogs

Impact of poor service

/ White papers

The Impact of Poor Service

We provided the research for a report, in conjunction with Parmenion, which reveals how far short of expectations many adviser platforms are falling. The research found that over the last 12 months, 88% of advisers needed to apologise to at least one of their clients on behalf of a platform, and that poor service delivery from platforms impacts 91% of advisers every day.

Impact of poor service

/ White papers

The Impact of Poor Platform Service

We provided the research for a report, in conjunction with Parmenion, which reveals how far short of expectations many adviser platforms are falling. The research found that over the last 12 months, 88% of advisers needed to apologise to at least one of their clients on behalf of a platform, and that poor service delivery from platforms impacts 91% of advisers every day.

/ White papers

Answering the Call

Service means a lot of things to a lot of different people. It’s so subjective it can be hard to put your finger on. This paper aims to challenge the status quo and inertia that’s built up in the sector for many years.