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Financial advice that everyone should know

The recent gating affecting the equity income fund run by Woodford Investment Management has sent a shiver through the financial advice world and forced the Financial Conduct Authority to look again at its plans for investments in non-liquid assets.

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Alongside these seismic events, the FCA has published its annual report on the work it has been doing over the past 12 months, and there are some matters that stand out as essential reading for financial advisers.


In recent years, the FCA has been concerned about the advice clients have been receiving on defined benefit pension transfers. There are serious concerns in this area, and a recent review of DB transfers found half were inappropriate. The regulator has urged all financial advisers to review how they conduct these to limit harm to clients. More than 160,000 transfers took place over the three-and-a-half-year period to September 2018, and they remain popular, so the issue is crucial and a concern for the industry.

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The new rules relating to the Senior Managers and Certification Regime is also set to have a serious impact on the culture of all 47,000 authorised companies not currently covered by this regulation. The FCA says the aim is to lay down basic standards for the financial services industry and everyone working in it.

Most firms will be using financial adviser software like that found at www.intelliflo.com/financial-adviser-software to ensure they do not fall foul of new regulatory requirements.


Elsewhere, there have been concerns about The Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation that came into force at the start of 2018. The FCA is worried about the lack of clarity and has provided help with documentation, although it feels further guidance may be needed. The regulator has said it will work with European bodies depending on the future relationship between the UK and the EU.

This brings us to Brexit. Advisers countrywide are preparing for Brexit, and the regulator has also identified the UK’s departure as its number-one priority given the uncertainty surrounding the eventual outcome. Its priorities are clients and UK market integrity.

Finally, in March, the FCA proposed new rules on platform-to-platform switching. These are expected to go live from the end of July 2020, giving firms time to plan any changes they need to implement.

There is plenty to think about before then.

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