In its response to key comments from all four panels, the Financial Conduct Authority also noted that two had called on the regulator to work on an approach that is “based on fact and evidence” rather than chasing headlines for coverage.
While the panels noted the positive outcomes of the Retail Distribution Review, one raised concerns over whether consumers can get the financial advice they need, highlighting a risk of availability which could lead many to take a “non-advised” route.
Another issue highlighted by the panels was the need for clear disclosure surrounding costs, the level of service being provided by advisers and what is expected of consumers themselves.
In response, the FCA said that the issue of availability of advice and clear disclosure of costs are “high on its list of priorities”.
“In December 2014 we published the results of analysis into the possible existence and size of an advice gap in the UK retail investments market and we continue to monitor and assess the issue,” it said.
“In addition, in this year’s business plan we outlined our intention to launch a market study into Emerging Distribution Models for retail investments. This work is currently being scoped.”
The Retail Distribution Review led to the banning of commission payments to UK advisers and signalled the move towards a fee-based remuneration model.
Adtionally, all four panels –the consumer panel, the practitioner panel, the smaller business practitioner panel, and the markets practitioner panel – also raised issues with the regulator’s communication strategy.
Courting headlines
In response to questions over its courting of headlines and the tone and content of communications relating to the outcomes of enforcement actions, the FCA said it has “reviewed and changed” its communication strategy over the past year.
“We made significant changes to the approval process of external publications and tightened the controls we apply to them,” it said.
“Our communications strategy also considers our tone of voice and the required balance between making the outcomes of enforcement action public to support our credible deterrence strategy with the risk of potentially undermining trust in firms and markets.”
The Pracitioner Panel also raised concerns about the increase in fees required from the industry for the FCA over 215/16 as well as an increase in the cost of regulation.
However, the FCA said it is committed to offering “value for money”, and that the increase in its budget is driven by an increase in headcount to help it deliver its competition objective, maintain its work on protecting consumers, and undertake more enforcement activity to combat market abuse and unauthorised business.
In March, the FCA announced overall funding requirement has increased by £35.2m to reach £481.6m from £446m last year.
