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I spent some time last week trying to explain the FCA Register to my team; they are highly intelligent with a growing understanding of our profession, yet it became clear that some of the terms used are ludicrously technical:
Principal
Appointed Representative
Insurance mediation
Passport Out
Now, imagine being a consumer looking at the Register trying to understand more about your prospective or existing adviser and, for example, the permissions they hold.
What chance do you have?
Very little right now without significant prior knowledge.
Criticism of the Register
It’s no wonder that the Register has been roundly criticised over recent weeks and months, including by the Work & Pensions Select Committee, who said: “The FCA online register is a potentially valuable resource but is currently very confusing. Vital consumer protection information, such as the suspensions of permissions, must be given far greater prominence.”
Giving evidence to the committee Rich Caddy, a former British Steel employee, said that the complex system of menus and drop-down boxes meant “you need some sort of degree to find a suitably qualified financial adviser”. Furthermore, The Personal Investment Management & Financial Advice Association (PIMFA), criticised the register for its “inadequate” search facility and excessive use of “regulatory jargon” in the register entries.
In its current format, the Register is clearly not fit for purpose.
Most of us will, therefore, welcome the news that the FCA has announced plans to significantly improve the Register, allowing consumers to search for advisers local to them, find those who hold certain qualifications and check for regulatory sanctions.
The announcement from the FCA, followed by conversations with the Yardstick team, and of course the New Model Adviser podcast, which I recorded last week with Ollie Smith alongside Karen Barrett of Unbiased, Adam Price of VouchedFor and Ray Adams of AdviserBook got me thinking about what I’d like to see included in the new Register.
Why do consumers use the FCA Register?
Before I set out my wish list, we need to first consider the reason consumers use the FCA Register in the first place. Two immediately spring to mind:
To find an adviser or planner with which to work
To undertake basic due diligence on an adviser or planner they are thinking of using or who they have already engaged
Either way, the Register must be accurate, contain the information the consumer needs to complete their task as well as being easy to use.
A quick tour of the existing Register shows how many entries have missing information with a prevalence of personal email addresses. Yes, it’s partly up to advisers and planners to ensure their data is up to date but the FCA has more work to do; a recent ruling requires the regulator to pay £22,150.70 compensation following its failure to update the Register.
So, what should the new Register contain?
The first thing it shouldn’t include is swathes of impenetrable technical jargon, which makes using the current Register so difficult for consumers. Once that’s cut out, I believe the new register should include information about:
A firm’s independent or restricted status, along with a simple definition of each. It’s astonishing that there is no, independently verified list, showing the independent or restricted status of all advisory firms
Fully completed contact details; these are often missing or out of date on the current register
Individual qualifications for advisers and planners; this would require the awarding bodies to communicate with the FCA
Firm level accreditations, for example Chartered status, again, this would need the Regulator and the awarding bodies to share information
Specialist permissions, such as the firm’s ability to advise on safeguarded benefits and, crucially, the date and reason any such permissions were changed or removed
Any sanctions or regulatory restrictions imposed on the firm
That’s not a huge list and deliberately so as there’s a danger in being too ambitious.
Why?
When it is launched the new register will have journalists, as well as advisers and planners, crawling all over it. If they find inaccuracies it will immediately undermine the new directory’s credibility and further erode trust. It’s essential that the new register is trusted from day one. That means it must be accurate and up to date, so let’s keep it simple to start with, building a firm foundation before we aim for something more ambitious, as I believe we should.
And finally…
This isn’t the Field of Dreams; we can’t expect to simply build the new directory and hope consumers immediately start using it.
The register must be given the publicity necessary to ensure those who need it know it’s there. It should be publicised in retirement wake up packs and reference to it made mandatory on advisers and planner’s websites. I also believe that the FCA should seek to work closely with the commercial directories mentioned earlier and the new single finance guidance body.
If that happens the new Register can become a hugely useful resource for consumers and go a long way toward improving trust in our profession. That’s why I believe it should start out slowly, with limited, yet relevant and accurate information, and then build from there.
If it does that it’ll become a trusted and valuable consumer resource, if not…