International Adviser has been told, anecdotally, that advice firms are increasingly submitting evidence to the Financial Conduct Authority (FCA) about their peers when they see wrongdoing.
To get a clearer picture, IA submitted a freedom of information request to the FCA.
It asked:
- In the past 12 months, how many financial advisory firms have submitted information/complaints highlighting suspected malpractice at another financial advisory firm?
- How does this compare to the previous year?
- Does this information go back any further and can you provide this information as a comparison?
The response from the FCA was that it did not know.
“I am writing to inform you that we do not hold the information you are seeking for [the] points as listed above.
“This is because we do not capture the information requested in the complaints return,” the FCA said.
Is there any point?
Advisers have expressed frustration to IA on a number of occasions about the lack of action taken by the financial watchdog against so-called ‘bad’ firms, which often collapse.
This leaves the ‘good’ firms paying higher Financial Services Compensation Scheme (FSCS) levies and potentially being hit with additional regulation.
With 58,000 retail and wholesale firms to supervise, the FCA welcomes and depends on information from industry.
But if advisers feel that the time and effort they put into gathering evidence is a waste of time, they will be less likely in future to do so.
Which, in turn, could mean that ‘bad’ firms operate for longer and put even more clients at risk.
Keeping track of the level of complaints would give the FCA a clearer picture of activity in the sector.
Failing to do so, however, means that it could be losing an opportunity to take more targeted action on the back of industry intelligence.
