PIMFA’s Advice/Guidance Working Group

As you will be aware, the government has committed to look at the boundary between regulated financial advice and guidance as part of its wider package of measures outlined in the Edinburgh Reforms.

We are supportive of such a review and consider that there are clear areas where firms could benefit from greater clarity on what constitutes guidance without necessarily straying into the provision of regulated financial advice. We consider it incumbent as an organisation to define what a good outcome for the industry would be with respect to any recalibration of the boundary and are therefore inviting firms from across the membership to participate in a newlylaunched working group to help us come to an industry wide position.

Firms who would be interested in participating in this working group should contact Simon Harrington.

We have previously set out proposals for a Simplified Advice regime and are committed to the success of the FCA’s proposals. However, we remain concerned about the commercial viability of the proposals as currently envisaged.

Please refer to the press release which contains a summary of our response, and the CP response in full.

FCA: Regulatory Initiatives Grid - February 2023

The FCA has published the sixth edition of the Regulatory Initiatives Grid setting out upcoming regulatory initiatives in the near, medium and long term.

The updated grid contains many of the provisions set out within the Government’s Edinburgh Reforms package – albeit we are yet to get clarity on what this would mean in practice, specifically with issues such as a review of the Senior Management and Certification Review (SM&CR).

In the main, the number of initiatives proposed by the FCA (even taking into account the numerous proposals set out by the Edinburgh Reforms) is broadly in line with previous grids and, as a result, PIMFA do not consider the forward-looking programme to be necessarily out of kilter with previous programmes of regulatory change.

Firms should note that the FCA is seeking to facilitate better user interaction with the underlying data, and as a result, the FCA has also published the grid in the form of an interactive dashboard and an excel spreadsheet.

Please contact Simon Harrington or Alexandra Roberts should you have any queries regarding specific initiatives set out within the grid.

IFPR implementation observations: quantifying threshold requirements and managing financial resources

The FCA’s multi-firm review published on the 27th February 22 assesses the progress of firms in adopting the Investment Firms Prudential Regime (IFPR), including the internal capital adequacy and risk assessment (ICARA) processes.

The initial observations from the first part of the review highlights areas for firms to consider how they can strengthen their processes:

• Firms that completed a ‘group ICARA’ process gave insufficient consideration of firmspecific risk and harms as required by MIFIDPRU

• Firms that completed an ICARA process on a ‘consolidated basis’ also need to operate solo ICARA processes as required by MIFIDPRU

• Assessments for the ICARA process need to be cohesive and fully integrated in the firm’s approach to managing financial resources to mitigate risk and harms

• Wind-down planning assessments remain weak in terms of scope and quantification

• Firms should ensure that all data submitted is accurate and of high quality

Those firms that have been reviewed in the initial phase should have received written feedback letters.

The FCA will continue the multi-firm review and report will be published following completion of the review.

Financial Action Task Force (FATF) –finalised guidance document

The Financial Action Task Force (FATF) published the outcomes of its Plenary session in February, including:

• FATF finalised guidance document to assist with implementation of the revised requirements of Recommendation 24. The guidance will be published in March 2023

• Agreement on enhancements to Recommendation 25 to ensure a balanced and coherent set of FATF standards on beneficial ownership

• FATF research/analysis on the methods that criminals use, including a list of risk indicatorsreport to be published in March 2023

• FATF report that explores the link between money laundering and art and antiquities, including a list of risk indicators to identify suspicious activitiesreport published 27 February 2023

Financial Ombudsman Service (FOS) rebrands it’s Technical Desk

The FOS Technical Desk has been rebranded the Business Support Hub and their Chief Operating Officer, Karl Khan, has published a blog explaining the reasons behind this. The hub is a great resource for financial businesses, professional representatives of consumers and consumer adviser organisations.

If you contact them, they can help with disputes about any regulated product or service, as well as general queries and emerging issues.

FCA Asset Management Supervision Strategy

The FCA have published a portfolio letter setting out its asset management supervisory strategy. Click here for further details.

Latest PIMFA Press Releases

PIMFA welcomes FCA proposals for core investment advice but warns they risk being undermined by unnecessary restrictions

PIMFA calls for Financial Conduct Authority to have greater role in protecting public from fraud

PIMFA delighted to welcome Paul Stockton and Stuart Dodson to its Board of Directors

Consumer Duty a ‘watershed moment’ that firms must take seriously, FCA warns at PIMFA conference

Read more press releases here

PIMFA Press Coverage

Pensions Age: Industry organisations back calls for MPAA review ahead of Budget

Professional Paraplanner: Viability of FCA’s proposed core advice regime questioned

IFA Magazine: PIMFA welcomes FCA proposals for core investment advice but warns they risk being undermined by unnecessary restrictions

Professional Adviser: PIMFA and Aegon warn FCA 'core' advice proposals need work

FT Adviser: Industry members lobby to restore MPAA ahead of Budget

See more of PIMFA in the press