The regulator laid out an in-depth discussion of the issues surrounding fact finds today, as part of proposals for implementing the recommendations of the Financial Advice Market Review.
A report outlined the FCA’s conclusion on the matter.
It stated: “Given the challenges of designing a standardised proforma for the qualitative elements of the fact find and the high existing levels of consistency in the objective elements of fact finds, we do not intend to introduce a mandatory standardised fact find at this stage.”
The regulator has asked for advisers to give their views on this as part of a consultation.
The report acknowledged that the length of the fact find process can act “as a potential barrier to the consumer seeking advice and/or switching to a new adviser”.
A lengthy or repeated fact find process is “likely to be particularly unattractive to consumers who are used to more immediate online solutions”, the paper stated.
The report covers the potential for fact finds to be portable, the limitations to this and the ways in which portability could contribute to the greater accessibility and affordability of advice.
The document stated that the “potential for porting fact finds is likely to be maximised through the innovative use of technology”.
It read: “There are a growing number of initiatives in the market currently offering this digital functionality. These third-party services are being offered to consumers as an opportunity to store and manage their personal information securely, and to consent to share it with the financial services companies of their choice.
“There is potential for greater time efficiencies for consumers, who can avoid duplication by updating information once with a single provider. A further advantage is the possibility for consumers to use their central data storage to more easily compare opportunities across the market. This is an area of growth, supported by legislation such as the General Data Protection Regulation which includes an individual’s right to portability of their data.
“These digital personal data solutions can integrate with financial firms operating online streamlined advisory services. However, there is no reason why a consumer’s personal repository of information could not be used, with their express permission, as the basis for a conventional advice consultation.”
The report also stated that the “ability of firms to use pre-existing information to facilitate a subsequent fact find, coupled with the high degree of standardisation of some sub-sets of fact find information between different advisers, presents opportunities in terms of ’porting’ a fact find from one adviser to another”.
The document stated: “This could be more convenient and cost-effective for the client and facilitate switching between advisers.”
Although the FCA said that a pre-completed fact find attested to by the client could provide the basis for that suitability assessment, it warned that it was still the responsibility of the firm looking to give advice to ensure that it has the information it needs to provide that service.
The FCA stated: “The firm cannot seek to shift this responsibility onto its client. However, they can ask the client to confirm that the information is complete and up-to-date as a means of meeting this obligation.”
The consultation GC17/4: Financial Advice Market Review: Implementation part 1 closes on 23 May.