The UK Financial Conduct Authority (FCA) has released its disclosure assessment tool to enable adviser firms to meet the regulatory standards under the Retail Distribution Review.
The market regulator said that disclosure assessment template allows firms to verify whether their methods for informing clients pertaining to their charges and services meet the regulator’s expectations.
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The publication of the document comes after the regulator’s thematic review of adviser charges which revealed that nearly 73% of firms were not clear on the cost of their advice to clients.
The file review template comprises statements on an adviser’s generic charging structure, the specific charges an individual client would be expected to pay, disclosure of service including restrictions, and disclosure of ongoing service.
The market watchdog said that use of the tool is not compulsory; however, it will enable them to review their own processes before the third post-RDR thematic review planned in mid-July.
It further stressed that it will initiate regulatory action against companies that are failing to be sufficiently clear with their clients.
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By GlobalDataA statement was cited by ftadviser.com as saying, "We plan to use this to assess disclosure in the third cycle of our review."
"We encourage firms to use this assessment template to make any required amendments to their client facing documentation prior to this.
"We expect to see significant improvements during the third cycle, which starts in mid-July 2014. We will consider further regulatory action against firms that are failing to be sufficiently clear with their clients," the statement added.
