8 Annuities review
The FCA is due to report on the annuities market in February and in particular the behaviour of providers. Kick-back schemes and high commission percentages at retirement look certain to come under the microscope, as well as any other instances where customers could potentially be disadvantaged. Providers seem certain to be the focus initially, but there will almost certainly be some impact on the adviser community and I would expect non-advised annuity broking to be under the microscope in particular.
9 MiFID II
The detail of this seems likely to emerge during 2014, but like a lot of European legislation, progress has been slow to say the least and at the time of writing there was uncertainty about what direction it could ultimately take. Thankfully, it is not expected to be a serious concern for the average adviser but it will be necessary to be alert for unintended consequences or surprises in the final directive, which will have to be addressed in the UK regulatory framework.
10 Fees
The FCA acknowledges that advisers have the right to cover costs and make a reasonable contribution to profit – but are you charging the right amount and does the way that you charge clients create any potential conflicts of interest that need to be managed? If so, how do you ensure these have been managed appropriately?
11 Meeting the standards for independence
If you have chosen independent status, are you meeting the standards? And if you have chosen to operate on a restricted basis, are you being entirely clear about the nature of your restrictions? The FCA paper TR13/5 provided valuable examples of good and poor practice and it is well worth investing some time using this as a yardstick to carry out your own assessment unless you choose to get an external consultancy to do this for you.
12 Consumer credit
The FCA takes over responsibility for consumer credit from the OFT on 1 April. Do your activities require a licence, or can you operate safely by amending your proposition to avoid the requirement?
Simon Thomas is head of policy of Tenet Group
