The Personal Finance Society (PFS) has written to the Financial Conduct Authority (FCA) and HM Treasury outlining actions the regulator and government could take to help the profession, clients and members of the public.
It suggested changes to regulatory requirements that would allow financial advisers to continue working during the coronavirus outbreak.
The letter calls for the regulator to push for a four-month waiver for advice firms searching for professional indemnity insurance.
This is because “there is evidence availability of cover continues to reduce and renewals are being seriously impacted by current lockdown measures introduced by the government to slowdown the spread of the coronavirus”, according to the PFS.
The professional body has also asked for HM Treasury to consider acting as reinsurer of last resort for PI insurance ahead of a wider funding review.
In addition, the PFS has requested an extension of the 48-month deadline for advisers to become qualified while giving advice under supervision and for the Mifid II requirement to notify clients when their investments falls by more than 10% to be suspended until further notice.
Further details
The letter also requests:
- The FCA push back the deadline for registering advisers on their directory from December 2020 to December 2021;
- Given the postponement of examination sittings as a result of government guidance, the FCA push back the deadline for pensions transfer specialists to achieve retail distribution review required qualifications. It is currently set at 1 October 2020;
- The watchdog issue communications to the public about the importance of not over-reacting to investment market behaviours during the coronavirus outbreak and seek guidance or advice;
- A “lighter touch” is taken to senior managers certification regime implementation; and
- Relaxing of regulatory financial returns requirements.
Keith Richards, chief executive of the PFS, said: “These are unprecedented times and to better meet the demand for more financial advice from impacted consumers, advisers will need help from the government and regulator.
“The impact of covid-19 will make it virtually impossible for financial advisers to talk to clients face-to-face, with the majority now having to reassure clients and help them with their needs over the telephone or internet, while contending with their own personal challenges.
“Over the coming months, the focus for all stakeholders must be on maximising the amount of time advisers can spend dealing with client needs, especially those in desperate need of the profession’s help.”
Flexibility
On 26 March, the FCA came out in support of solo-regulated firms that might be struggling with capital and liquidity during the coronavirus outbreak.
The financial watchdog encouraged businesses to use any buffers that have already been set, if needed, and to start preparing for any possibility, including exiting the market if they cannot overcome their financial struggles.
Richards added: “The FCA’s announcement on ‘providing flexibility’ for solo-regulated firms by allowing them to access cash reserves in a prudent manner, is a welcome one.
“However, we believe more can be done to unburden firms over coming months.”
