FCA wants to extend adviser complaints reporting rules


The FCA plans to extend its rules on complaints reporting to ensure advisers who recommend securities and derivatives meet the same reporting standards as retail investment advisers.

The FSA brought in rules under the RDR in November 2011 which require firms to report complaints related to retail investment activities carried out by retail investment advisers.

Firms have to submit a complaints report to the FCA every six months, even if they have had no complaints, and notify the regulator where an adviser has three upheld complaints within a year or one complaint paying more than £50,000 redress.

But a review of adviser research carried out by the regulator last year has found some firms had interpreted the rules to exclude certain activities carried out by their advisers, so were not reporting complaints arising from advice on shares and derivatives.

The FCA plans to amend its complaint reporting rules so that they cover all activities carried out by retail investment advisers.

The regulator says it is increasingly relying on more data to intervene earlier and make “quicker, bolder decisions”. Complaints reporting data will be used to monitor individual advisers at the point they gain regulatory approval, when advisers move to new firms and an ongoing basis.

The FCA says: “Adjusting the rules to refer to activities carried out when acting as a retail investment adviser will align the scope of all the RDR professionalism rules to the same individuals and the activities they carry out.

“This will ensure advisers are subject to the same standards and scrutiny, for example, if they advise on collective investment schemes or on shares or derivatives.

“We are concerned if we do not make the proposed adjustment, poor quality advisers that specialise in shares or derivatives for example could fall under our radar and the clients of these advisers could suffer.”