Round Up Autumn 2018

3 New financial services directory of certified individuals The FCA proposes to introduce a new directory of certified individuals to coincide with the introduction of the Senior Managers and Certification Regime (SM&CR) in December 2019. Individuals to be included will be: -- Those holding any functions subject to a qualification requirement, such as mortgage advisers, investment advisers and investment managers. -- Anybody supervising or managing individuals performing the above functions -- Non-executive directors. -- Sole traders. -- Relevant staff within AR firms. All authorised firms will need to submit the information for the directory via the Connect system and will be required to inform the FCA of any changes. The SM&CR comes in on 9 December 2019 and there will be a 12 month transitional period. The directory will be freely available and accessible alongside the existing Financial Services Register, which will continue to be maintained for the individuals in the relevant senior manager functions. These will continue to be centrally approved by the FCA. Investment platforms market study The FCA has issued an interim report on its market study on investment platforms (MS17/1.2) and is inviting comment from all interested parties. The paper notes client satisfaction is high, and the market appears to be working well in many respects, but identifies the following concerns… Poor competition between platforms in relation to: -- The difficulty of switching. -- Problems faced by clients in shopping around for a lower cost platform. -- Disparities between risks and expected returns for model portfolios with similar risk labels. -- Some clients using direct to client platforms and holding too much cash, and missing out on investment returns. -- Orphan clients paying higher charges and not receiving services in return. Commercial practices dampening competition on fund discounts by restriction of fund managers’ incentives or ability to offer discounts to competitor platforms. Poor presentation of charges at different stages of the client’s decision making. Potential breaches of inducement rules by advisers using services offered by platform providers. Such as training, white-labelling, bulk re-balancing and model portfolio management tools which may benefit the adviser but not the client. regulatory matters The FCA is consulting on a package of measures to protect clients, improve engagement and promote competition in the retirement income market. Within CP18/17, the FCA sets out its proposed package of remedies from the Retirement Outcomes Review (the FCA’s in-depth look at how the pensions and retirement income sector has been working since the pension freedoms were introduced in 2015). It consults on some issues and raises discussion points on others. Three key areas are covered: -- Talking about pension choices earlier. -- Measures to help clients when they access their pension pot. -- Measures to help clients after accessing their pension pot. FCA retirement outcomes review