Earlier in the year, the FCA published the findings from its review into ongoing financial advice services. The tone was more positive than many in the industry had anticipated, but embedded in the report was a crucial ‘next step’ call to action that some firms may have overlooked.
The FCA outlined three clear next steps for firms:
- Consider the FCA’s findings.
- Assess whether you can evidence that ongoing services have been delivered as promised and required.
- Evaluate whether any clients have experienced harm and, if so, consider proactive contact.
The FCA’s guidance was intentionally high-level, leaving it to firms to interpret the detail. Below, we break down what each step means in practice and what your firm should be doing now.
1. Consider the FCA findings
Firms should ensure there is clear evidence that the FCA’s findings have been acknowledged and acted upon by senior management. This can be demonstrated by:
Senior manager engagement
Ensure individuals with appropriate seniority have reviewed the FCA’s findings.
Board-level discussion
Ensure the findings are discussed at senior management or board meetings. Use meeting agendas, minutes and action logs to evidence this engagement.
Documented approach
Agree and record a firm-wide plan to assess whether all ongoing services have been delivered. This should include:
- What evidence will be reviewed
- Who will carry out the assessment
- The timeline for completion
Your senior management team may need to meet more frequently until your assessment and any follow-up actions are completed.
2. Evidence that services have been delivered
The FCA expects firms to assess whether they can clearly demonstrate that all ongoing services have been delivered, in line with client agreements and FCA rules.
While many firms can show that reviews or suitability assessments have taken place, these are often only part of the service commitment. It’s essential to account for every component agreed with the client.
The FCA’s ongoing advice findings are a ‘double-edged sword’
What firms should do:
Review data/management information (MI)
You may already hold centralised data to show which services were agreed with clients and whether they were delivered as promised.
Use a sampling approach where appropriate
Where data isn’t available or doesn’t tell the full story, a structured sample of client files can be an appropriate starting point.
Document the sampling plan
Record your rationale for how the sample was selected, what will be reviewed, who is responsible and the expected timescales.
Compare what was promised with what was delivered
Use MI, client records and signed agreements to verify whether each contracted service was delivered, going beyond suitability reviews to include all promised touchpoints and reports. Clearly document your findings.
Check compliance with FCA rules
Review files and MI against COBS requirements and document how regulatory requirements have been met.
Escalate issues promptly
Establish a clear process for raising any issues or discrepancies to senior decision makers. This should include prompt review and resolution, which may involve addressing problems with individual clients or updating processes, client disclosures, contracts, or the overall ongoing service proposition.
Assess data quality and gaps
If missing or inconsistent data is uncovered, take steps to strengthen service tracking processes. This may include process refinements or back-office system upgrades.
3. Proactive review – deciding when to contact clients
Once your data and records have been reviewed, the FCA expects firms to consider whether any identified failings could have caused harm, and if so, whether affected clients should be contacted.
This step isn’t optional if harm is identified. It forms part of a Consumer Duty-aligned approach to putting things right. What firms should do:
Make a clear decision on proactive review
Decide whether you will undertake a proactive client review, based on your findings. This should be agreed at senior management level, with the rationale, actions and timescales clearly documented.
Review client history as far back as 2018
If issues are identified, remember that current rules on annual suitability reviews came into force in 2018. This is the key reference point when assessing whether services were missed or clients were at risk of harm.
Understand what may constitute harm. Examples include:
- A client paid for a service that wasn’t delivered
- A missed review led to a client being left in an unsuitable or suboptimal position
Engage your PI insurer early
Before contacting clients, it’s essential to speak to your professional indemnity insurer to ensure the appropriate approach is taken and avoid unintended complications.
Plan for capacity and remediation
If issues are identified, you may need to redeliver services, offer redress, or respond to complaints. Ensure your firm has the capacity and a clear process in place to act quickly.
Maintain oversight
Senior management should monitor the review process closely, meeting as needed until all issues have been addressed and client outcomes resolved. Actions and progress should be clearly documented.
While the FCA’s guidance may have been light on detail, its expectations are clear. Taking documented, timely and well-evidenced steps will not only support compliance but also improve operational processes, strengthen your client proposition and demonstrate a commitment to good outcomes.
Julie Hardie is policy consultant at threesixty services
