If your regulatory requirements and business risks do evolve, again, take time to work with your insurance broker to assess coverage limits, exclusions and policy terms, making adjustments as necessary to maintain comprehensive protection.
As a result of the consumer duty changes, IFA firms are now required to demonstrate that they “act in good faith towards customers, avoid causing them foreseeable harm, and enable and support them to pursue their financial objectives.”
This may need to be demonstrated if you receive an FCA supervisory visit, and the preparation for these needs to be carefully handled.
Preparing for an FCA supervisory visit
So, what should you do both to prepare for a supervisory visit and to survive one in good order? There are five simple priorities.
1. Know your regulatory obligations: Familiarise yourself with the FCA's handbook and relevant regulatory guidelines applicable to your advisory practice. Ensure compliance with key requirements relating to client suitability, disclosure of information, conflicts of interest, and record-keeping obligations.
2. Document your processes: Maintain comprehensive records of your advice processes, including client onboarding procedures, risk assessments, suitability assessments, and investment recommendations. Documentation serves as evidence of your adherence to regulatory requirements and facilitates transparency during FCA inspections.
3. Conduct internal audits: Regularly conduct internal audits and reviews to assess compliance with regulatory obligations and identify areas for improvement. Address any deficiencies or gaps in your processes proactively to mitigate potential issues during an FCA visit.
4. Train your staff: Provide ongoing training and development opportunities for your team to enhance their understanding of regulatory requirements and expectations. Foster a culture of compliance and accountability within your firm, where staff are empowered to uphold professional standards and regulatory compliance.
5. Engage with industry resources: Leverage industry resources and professional associations to stay informed about regulatory developments, best practices, and emerging trends in the financial advisory sector. Participate in relevant training seminars, webinars, and networking events to enhance your knowledge and exchange insights with peers.
By adopting a proactive and diligent approach to regulatory compliance and risk management, financial advisers can navigate the challenges of obtaining PII and prepare effectively for FCA supervisory visits.
While the regulatory landscape may pose complexities and uncertainties, proactive engagement and strategic planning can help advisers safeguard their businesses and maintain trust and confidence among clients, insurers and regulators alike.
Kate Albert is chief executive of Kova Professions
