FCA warns some financial advice firms about 'poor practice'
Published: 03:30 20 Mar 2024 EDT
The City financial watchdog has written to bosses in the financial advice sector after a review found some firms were neglecting the needs of their customers.
To see if firms are complying with new Consumer Duty rules, the Financial Conduct Authority (FCA) carried out a thematic review of retirement income advice to see how exactly it was being provided.
It found that most firms are doing well but some are not, with the worst examples including firms that provided incorrect information to customers, while some did not provide advice that would generate sustainable levels of income to support retirement.
Some recommendations resulted in consumers incurring unnecessary charges, though the regulator said this was found in just a "small number of instances".
In the letter, the FCA told chief executives to review their processes and provided an advice assessment tool and advice on cash flow modelling.
FCA director Sarah Pritchard said some firms are helping consumers access pension benefits, invest with confidence and have a sustainable income when they retire, but "others are not even getting the basics right and putting their customers' futures at risk.
"We urge all firms to take on board our findings and review their own processes. Where they do not, we will act."
