Now public affairs and regulatory experts at Cicero Group, Grant Thornton and TCC Consulting say, with MPs now asking questions, the chances of a reprieve have increased substantially.
As the Senior Managers and Certification Regime (SMCR) comes into force, it was expected that client-facing ‘Customer Function 30′ advisers would fall off the register or that the information might simply become out of date. The register looked set to become of little use to consumers and indeed to advisers checking out the status and career history of new hires.
TCC technical director Phil Deeks says: “The announcement of the extension of the SMCR heralded the proposed demise of the FCA register for CF30s – certification and self-regulation was the proposed future and the ‘need’ to maintain a register was deemed superfluous to requirements. Operationally, it also frees up resource within the FCA – moving away from the relatively administrative task of maintaining the register for CF30s to other, higher priory and more urgent, challenges.”
However, recent events may have added some political heft to the adviser and industry opposition.
The Work and Pensions Select Committee inquiry into pension freedoms has seen MPs asking some very searching questions about British Steel Pension Scheme transfers – indeed it has been tantamount to an mini-inquiry within an inquiry.
The committee and its chair, veteran Labour MP Frank Field, appear less than impressed with the FCA approach and the issue of the register’s future, prompted by BSPS members’ concerns, has been raised in correspondence with the FCA.
The relevant passages come in a letter to Field from the FCA director of supervision Megan Butler published in late December in response to a previous Field letter.
Field said: “Can you confirm your experiences in Port Talbot will inform your decision of whether to relax your proposed certification regime?”
Butler: “In 2016, as part of the Bank of England and Financial Services Act, Parliament gave the FCA a duty to extend SMCR to the majority of the other firms the FCA regulates. This includes insurers, asset managers, consumer credit firms and investment advisers. During summer 2017 we published a consultation setting out how, in line with this legislation, we intend to extend the SMCR.
“As part of this, we proposed that any individual undertaking a Certification Function, including customer-facing investment advisers, would need to be certified as fit-and-proper by their firm at least annually. We also proposed that these individuals would not appear on our Financial Services Register reflecting that firms, not the FCA, would be responsible for certifying these individuals as fit-and-proper to undertake their role.
“We received substantial feedback to our suggestion that certified individuals should not appear on our register. A number of these respondents expressed concern that this proposal could inhibit consumers’ ability to identify an adviser and ensure they are appropriately qualified.
“We are currently reviewing all feedback to this consultation, including the input received around the register. We have listened to these concerns and are considering this feedback, as well as the experiences in Port Talbot, as we work toward determining the right approach to extending the SMCR.”
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