Regulation Matters Issue 145

Regulation Matters Issue 145

Issue 145

Regulation Matters Welcome to this edition of Regulation Matters covering regulatory updates which impact financial advisers. If you have any questions about any of the subject matters and would like further information on the additional service available to support directly authorised firms, please contact 0800 085 0825 .

Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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IN THIS ISSUE

Who is it relevant to? Summary

Action recommended / for your information?

Actioned (please tick)

Subject

SM&CR – FCA Implementation Checklists updated Increasing tendency on the part of the FCA to be a ‘price regulator’ A new online tool to help your corporate clients comply with their re-enrolment obligations.

SM&CR

All firms

Action recommended

PRICING OF SERVICES – FCA FOCUS

All firms

Action recommended

Firms who advise employers on workplace schemes

THE PENSIONS REGULATOR – NEW RE- ENROLMENT TOOL

Action recommended

Actions recommended in last month’s issue of Regulation Matters.

REMINDER OF KEY REGULATION MATTERS All firms

For your information

REGULATORY MATTERS ON THE HORIZON

Overview of FCA planned activity.

All firms

For your information

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SM&CR: FCA Implementation Checklists AT A GLANCE The FCA has made available implementation checklists for firms to help them ensure that they are on track for 9th December 2019. We think these checklists are extremely useful because they cover the necessary steps concisely. Importantly, the checklists are drafted in a way that will help reassure Core firms that implementing SM&CR is manageable. The checklists are available here: https://www.fca.org.uk/firms/senior-managers-certification- regime/solo-regulated-firms/checklists Implementing SM&CR for a typical Core firm will require some work and take some time so you do need to be making progress. However, don’t be daunted by it. Use the checklist at the end of the link above, together with the FCA’s Guide for Solo-Regulated Firms as a starting point. Depending on the size of your firm and the types of staff and business areas within it, you might need help with aspects of SM&CR. For example, you might need help with drafting statements of responsibilities, Conduct training or making judgements about which roles should be identified as Certificated Functions. At TenetSelect we offer SM&CR themed audits to provide support and clarity to ensure you are ready for implementation. For more information or to chat with one of our experts, please call us on 0800 085 0825. The FCA: A Pricing Regulator AT A GLANCE While it used to be said that the FCA is not a price regulator, it’s no longer true to say that. The FCA has already introduced price caps on workplace pensions in addition to the rent-to-own and ‘payday loan’ sectors. Other recent developments indicate an increased FCA focus on the cost/price of financial products and services, including in our sector, which seem to signal that the FCA is set to become more intrusive in determining the level of fees rather than focusing on transparency/disclosure.

Want to know more? CLICK HERE (or turn to page 5) for a more detailed summary, including recommended actions.

The Pension Regulator: New Online Re-Enrolment Tool AT A GLANCE

The new online tool takes your corporate clients through the steps they need to take in order to comply with their obligations with regard to re-enrolling opt-outs into their workplace scheme every three years and declaring to the regulator that they have done so. The tool is available here https://www.thepensionsregulator.gov.uk/en/employers/re-enrolment

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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Reminder of key regulatory matters Below is a useful reminder of key regulatory matters affecting financial adviser firms including actions recommended in last month’s issue of Regulation Matters.

Subject

Recommended Action

Further Information

1

SM&CR

https://www.fca.org.uk/firms/senior-managers- certification-regime/solo-regulated-firms

Download the FCA’s guidance and consider what action your firm needs to take. Read the Consultation Paper, think about the changes you will need to make if the proposals are implemented unchanged and, if you wish, respond to the Consultation by the deadline of 30th October 2019. Read the first-stage Consultation Paper and, if you wish, respond to the consultation by the deadline of 4th October 2019.

2

FCA consultation, proposing a ban on contingent charging for pension transfer advice

Full information available on the FCA website, here: https://www.fca.org.uk/publications/consultation- papers/cp19-25-pension-transfer-advice

3

Vulnerable customers

Full information available on the FCA website, here: https://www.fca.org.uk/news/press-releases/fca- launches-consultation-guiding-firms-fair-treatment- vulnerable-customers

Regulatory Matters on the Horizon

It’s an ever-changing market with a constant stream of new and updated regulation for financial advisers to worry about. We have provided a brief overview of the FCA’s planned activity as we currently understand it, but please be aware that the FCA does sometimes change the timing. Rest assured, as part of our service we will keep you informed and provide guidance to help you remain compliant.

Subject

Publication Type

Expected Date

Intended Audience

1

Proposed ban on contingent charging for DB Transfer Advice FCA second-stage consultation on guidance on the

Policy Statement and revised rules

Q1 2020

Firms that provide advice on pension transfers

2

Consultation paper

Q1 2020

All firms

fair treatment of vulnerable customers

3

Mortgage Advice & Selling Standards (CP19/17)

Policy Statement and revised rules

Q4 2020

Mortgage firms

CLICK HERE to return to page 2.

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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The FCA: A Pricing Regulator

It used to be said that the FCA is not a price regulator. Even the FCA used to say it. Instead, the FCA’s focus was on transparency and disclosure, with consumers left to judge what represents value for money. However, that is no longer the case. In January 2015, the FCA introduced a price cap for ‘payday loans’ and in April this year, it introduced a price cap on ‘rent-to-own’ sector. Both of those moves were firmly aimed at protecting particularly vulnerable consumers. Three recent developments signal that the FCA is set to become more intrusive in relation to pricing levels generally. n In July 2019, the FCA published a feedback statement on fair pricing in financial services. The FCA acknowledges that the judgement of when pricing practices are unfair is not always straightforward. Therefore, it has developed a fair pricing framework, which indicates the FCA’s thinking on the issue. In Feedback Statement, the FCA says that ‘fair pricing is relevant for all consumers’, not just vulnerable people (although it will be more likely to intervene to protect vulnerable consumers). The FCA says that it intends to embed the framework into its regulatory approach and will ‘report further in Q4 2019/20.’ n In July 2019, the House of Commons Work and Pensions Committee published a report on Pension Costs and Transparency. In its report, the Committee strongly urges the FCA to introduce a 0.75% price cap on the new pathways for members of pension schemes who take benefits on a non-advised basis.

n In its August 2019 consultation on a proposed ban on contingent charging for pension transfer advice, the FCA set out how low it thinks the typical cost of pension transfer advice could be while still leaving a profit margin. It put forward a suggestion that it should be possible to provide advice on pension transfers for £3,000 to £3,500. It also said that the average price of £4,800 to £7,250 that its investigations found was paid for pension transfer advice (across all cases – whether advised to transfer or not to transfer) was ‘more than [it] thinks [pension transfer advice] should cost’. Firms should be aware of the FCA’s increasing focus on the level of prices/fees. In addition, firms should keep under review the services that they provide for their clients and their fees in order to ensure that: a) every client receives the services that they are paying for in a timely manner, in particular with regard to ongoing services; and b) they continually reassess whether those services represent value for money. WHAT SHOULD FIRMS DO NOW?

CLICK HERE to return to page 3.

DO YOU NEED FURTHER HELP OR SUPPORT? If you have concerns about being compliant, get in touch with TenetSelect, the directly authorised regulatory experts, by calling 0800 085 0825. We have a wide range of services to help your firm, and we would love to have a chat to tell you more. Regulation Matters is produced by TenetSelect as guidance only and is based on their interpretation, it is not and should not be relied upon as professional or legal advice. TenetSelect does not accept any liability for any losses arising directly or indirectly in connection with any of the information contained within Regulations Matters to the extent it can be excluded by law.

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A range of services to add value to your firm At TenetSelect, we provide a wide range of services and expertise to help directly authorised firms meet their compliance requirements and grow their business. If you have a particular compliance concern or any of our services are of interest, please get in touch by calling 0800 085 0825.

COMPLIANCE SUPPORT SOLUTIONS File checking service n Full range of product areas covered, including pension transfers Themed audit n Systems & controls, Training & Competence, disclosure & ongoing servicing, Centralised Investment Proposition Fully outsourced T&C implementation n One-to-one visits, file reviews, observations/role plays Compliance helpdesk for ongoing queries n Access to our regulatory experts as and when you need support Financial promotions and stationery approval n Assessment of your marketing and stationery to help ensure it meets the FCA’s requirements On-site attendance for FCA visit n A regulatory expert on hand to reduce potential risk Comprehensive compliance guidance manual n Manual which you can adopt for your firm Compliance, systems & controls template documentation n Wide range of documentation available via the Extranet Full suite of regulatory registers n Designed to capture a variety of management information and highlight potential risks Regulatory guidance bulletins n Ongoing updates and guidance to help you remain compliant RMAR report completion n Software to help you do it or outsource it to us Complaint handling service n Outsource the handling of client complaints

RESEARCH, TECHNICAL & SPECIALIST INVESTMENT SUPPORT Research & technical support n The Tenet panel, technical guidance, including access to a helpdesk Specialist investment support n Review of EIS/BPR/Tax Planning Schemes and the client profile n Feedback on general suitability of the client and the legitimacy of the scheme n Full paraplanning service including >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6

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