It is now eight years since electronic regulatory reporting was introduced for firms in the financial services sector. Firms must collect data and use it to complete the Retail Mediation Activities Return (RMAR), either quarterly or half-yearly, depending on the size of the firm.
The FCA collects this information to provide a framework for its supervision activities and to monitor firms’ capital adequacy and financial soundness. The online form has 12 sections made up of firm-specific data such as the balance sheet, profit and loss, professional indemnity insurance etc.
Over the years, firms have had issues with RMAR for a number of reasons. When electronic reporting was first introduced, it soon became clear that the system was just not up to the job, regularly crashing during the peak reporting periods.
I also recall there was a time when the FSA’s contact centre would talk firms through ‘work-arounds’ to ensure that the forms could be submitted, which was certainly not ideal. But the teething problems were fairly quickly remedied and apart from the odd hiccup all appeared to be well. That is until now.
Information overload
One gripe that has often been repeated to the APFA is the amount of information that is required to complete the RMAR and certainly, in the post-RDR landscape, we have received more negative member feedback.
Following the implementation of RDR, the FCA introduced two new sections to the RMAR about adviser and consultancy charging, thereby adding in excess of 100 new fields (sections K and L).
It is clear from discussions with some of our members that firms are unsure of the data they should be submitting and the use of inconsistent terminology has further increased the frustration and confusion around exactly what the regulator is looking for and why.
Time poorly spent
Earlier this year, research done by the APFA revealed that, on average, adviser firms spend 12 hours collecting and submitting the data each time that the RMAR is due. As most adviser firms must submit the data twice a year, that is 24 hours over the course of a year on RMAR reporting. That is not an inconsequential amount of time.
The figures, collected in NMG Consulting’s Financial Adviser Census, expose the extent to which these reporting requirements placed upon advisers by the FCA are affecting their workload.
We are concerned about the time advisers spend complying with these requirements, especially given the impact the wider economic environment and RDR are already having on revenues. This reporting is yet another drain on resources.
We want to see the FCA make the requirements they demand of advisers more streamlined, but we also want the purpose of the reporting to be made crystal clear.
We support a drive towards greater transparency, but this will not be achieved by the unthinking collection or publication of more and more data with no clear aim. We need to be sure that what the FCA is asking advisers to provide is used by the FCA, especially given the time it takes to compile the information.
We would like to see a full scale review of the RMAR data fields and for the FCA to justify to the industry why it needs such granular information. It is time to remove redundant information from the return altogether.
