INTRODUCTION
As part of its ongoing supervisory work, and also by way of specific thematic work, the FSA undertakes reviews of certain areas of business. These FSA Reviews include areas where problems have previously become apparent, and also further areas that it considers may present a risk to the FSA's statutory objectives being achieved.
The results of the work enables the FSA to deal with particular sector or industry-wide problems and deficiencies in a risk based and proportionate way.
Results of most of the reviews will be used to provide guidance to firms, including examples of good and bad practices, to enable them to identify areas of concern within their own businesses and address the risks.
FORTHCOMING FINANCIAL ADVICE PROJECTS
The areas that the FSA has listed as those which it will be paying particular attention to during 2006/2007 are divided into three categories which are set out below:
- projects that will have particular attention paid to them during supervisory visits that also fall within the FSA's major thematic work for the year;
- projects that do not fall within the major thematic reviews planned for the year but to which firms can expect some attention during supervisory visits; and
- projects that fall within the FSA's major thematic work for the year but have not been listed as matter to which specific attention will be given during supervisory visits. Firms should however be aware that this does not mean that the FSA will not look at these matters during supervisory visits, simply that they have not been highlighted as likely to receive specific attention.
3.1 Projects to be Reviewed in Day-to-Day Supervision of Firms which are also Part of FSA's Major Thematic Work in 2006/2007
Review of Electronic Reporting Forms
The FSA are obtaining feedback on the firms' experience of completing the forms and also looking at the source material and documentation firms use to complete their RMAR return.
The work will be conducted by desk based reviews and supervisory visits with a view to making the forms easier to complete and more focused, with the aim of improving effectiveness and making the FSA easier to do business with.
3.2 Projects which are not part of FSA's Major Thematic Work For 2006/2007 but are Listed as Areas for Specific Review in Day-To-Day Supervision of Firms
Quality of Outsourcing
The FSA aims to assist retail consumers in achieving a fair deal by ensuring that improvements are made to the quality of advice given by compliance consultants to financial advisers.
Quality of Advice
Reviews are to be undertaken with the aim of ensuring that there has been a measurable improvement in the quality of advice given to customers.
Complaints Handling
Reviews are to be undertaken to ensure that complaints are handled by firms in a way that ensures customers are treated fairly.
Inconsistent Standards in dealing with Specialist Pension Drawdown
Reviews are to be conducted to ensure that firms understand the products that they are selling and fully and clearly explain the options available to customers with a view to ensuring that all communications are clear, fair and not misleading.
Phoenixing
Reviews are to be undertaken to ensure that firms do not move assets from one firm to another (creating a "Phoenix firm")without transferring the liabilities as well. Failure to do this poses a risk to the objective for firms to conduct their business with integrity and to treat its customers fairly.
Under capitalisation
Firms will be reviewed to ensure that they have sufficient, and accurately reported, financial resources, in compliance with the FSA requirement to maintain adequate financial resources.
Disclosure Documentation
The reviews to be conducted ensure that firms are providing appropriate, accurate disclosure documentation to customers in a timely manner.
3.3 Projects which are part of FSA's Major Themes in 2006/2007 but have not been Listed for Specific Review During Supervisory Visits
Effectiveness Reviews
There is a rolling program of reviews in place to assess how far the FSA requirements are delivering the intended outcomes for consumers.
The reviews will be conducted by way of consumer research, mystery shopping and desk-based reviews to test the effectiveness of the regimes in the marketplace.
Treating Customers Fairly (TCF)
This is a key element in the FSA's retail agenda and includes the following strands:
- Quality of advice;
- TCF management information;
- Relationships between providers and distributors; and
- Implementation of the principles of TCF into businesses.
The reviews will be conducted by way of desk based reviews, mystery shopping and supervisory visits to assess the areas above, following which a paper, together with examples of good and bad practice will be published.
