FCA's retirement review spurs advisers to change processes

Two-thirds of advisers (66%) have changed their processes as a result of the FCA’s Thematic Review of Retirement Income Advice published earlier this year. Research from financial services mutual Wesleyan suggested that nearly every adviser (91%) has reviewed their processes. with two-thirds of them acting as a result. According to the survey, nine in ten advisers (90%) have helped clients at or near retirement adjust their asset allocation. The FCA announced in March it would write to the chief executives of financial advice firms, asking them to review their retirement income advice processes. The review suggested that while there are no systemic issues in retirement income advice practices, there are pockets where practices could be improved, including approaches to determining income withdrawal and gathering information to demonstrate advice suitability. According to the new survey, introducing or changing advice file record-keeping was the most common modification (64%), while three in five (60%) advisers have introduced or changed their client screening processes. Some 45% of advisers have altered the way they segment their clients to offer more suitable service while a further quarter (27%) said that while they haven’t made changes to their processes yet, they plan to do so. Overall, more than three quarters (78%) of advisers polled agreed that the thematic review has increased the industry’s focus on providing better, more suitable retirement advice. Karen Blatchford, Wesleyan’s managing director of intermediary distribution said: “The industry has taken the FCA’s findings seriously. “Advisers are being diligent and acting in line with the review’s principles to make sure they’re delivering the best possible outcomes for clients. Revisiting and improving processes will also support firms’ ongoing compliance with Consumer Duty requirements.” The research also found that nine in ten (90%) advisers have helped clients who are at or nearing retirement adjust their asset allocation in response to the FCA’s findings with the most popular steps being to increase bonds allocation (55%), followed by decreasing equities allocation (40%). The findings were based on a survey of 300 UK-based financial advisers regulated to give advice on long-term savings, conducted by Censuswide on behalf of Wesleyan between 20-23 August.

FCA's retirement review spurs advisers to change processes

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