Chat on WhatsApp

0114 266 4216

March 25, 2024

FCA review finds 231 firms charged clients for ongoing advice they didn’t deliver

The FCA has published details of a thematic review it carried out on retirement income advice.

The results of which found that 231 firms charged for ongoing advice but did not deliver.

Around 6,108 of clients have been affected by this issue. That’s 2.9% of the 213,128 people who had paid for an annual review in 2022 but didn’t receive it.

According to the FCA, some firms were unable to provide the number of missed reviews but did indicate why reviews were missed.

The key reasons annual reviews weren’t given were listed as:

  • Customers declined or did not respond (cited by 382 firms)
  • Firm error or oversight (29 firms)
  • Employee resource (10 firms)
  • Data was either not measured or not recorded centrally (157 firms)

Findings from the FCA review

The FCA’s findings are drawn from 977 firms who responded to its data survey. As well as a desk-based review of the advice models and files of a sample of 24 firms.

The review has identified examples of good practice in the market, showing that some firms have considered their customers’ needs.

However, the FCA said it also found some examples where firms were not taking account of the needs of their customers.

This included where firms operated in a way that was “unlikely to lead to good customer outcomes”

Sarah Pritchard, Executive Director of Markets and International, at the FCA said:  ‘Some firms are getting this right and making a real difference to their customers. However, 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.’

The FCA said that most of the advice files it had reviewed showed that the advice provided was suitable. However, in a small number of instances it says recommendations resulted in consumers losing guarantees or incurring unnecessary charges.

Following this thematic review, the FCA has now written to financial advice firms, asking them to review their processes when providing retirement income advice.

FCA highlights ongoing advice charge issues

The FCA has recently highlighted the issues of ongoing advice charges.

In February it wrote to 20 of the biggest advice firms requesting information about their ongoing advice services.

And following an increase in customer complaints, St James’s Place (SJP) set aside £426m to address potential refunds.

This could be owed to clients who had paid an ongoing service fee, but there’s no evidence that they received an annual review or service.

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.