FCA second suitability review faces an indefinite delaywritten by Bella Palmer
Details of the Assessing Suitability Review 2 were published in January
The Financial Conduct Authority’s (FCA) second suitability review faces an indefinite delay after it appeared to drop off the regulator’s timetable completely.
In an update on the FCA’s ongoing regulatory work, published today, the regulator’s review into initial and ongoing advice did not feature, having initially been shelved in March.
At the time, the regulator said it made the move in order for it to focus on ‘more critical activity’, with the possibility it would be picked up in the first quarter of 2021.
Details of the Assessing Suitability Review 2, the FCA’s second evaluation of the market for pensions and investment advice, were published in January, in which it said it will include a focus on initial and ongoing advice to consumers who are taking an income in retirement.
In its last review, published in 2017, the regulator concluded the sector was broadly working well, with 90% of advice appropriately.
However, in January the FCA was much more critical however, saying ‘ongoing suitability failings by financial advisers are causing ‘significant harm to consumers’ financial well-being’.
‘Too much advice is still not of an acceptable standard’ it added, with the number of savers told to cash out of defined benefit pension schemes a particular area of concern.
In June, the FCA launched 30 investigations following a major review of pensions advice, saying that while standards have improved, it still found ‘too much unsuitable or non-compliant advice’.
The regulator launched the investigation into defined benefit transfers after ruling in January that it had uncovered ‘significant harm to consumers’ financial wellbeing’ and that ‘too much advice is still not of an acceptable standard’.
Clients could lose as much as £20bn from unsuitable defined benefit (DB) transfers, the regulator recently estimated.
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