The Financial Conduct Authority (FCA) has revealed it ordered seven skilled person reviews into financial advice companies between 2017 and 2020, according to a freedom of information request submitted by International Adviser.
The regulator said it commissioned four reviews in the 2017-18 financial year; two in 2018-19 and one in 2019-2020.
It added that some of the seven investigations are still in progress, but it could not reveal which.
What does it mean?
A skilled persons report is a regulatory tool, under section 166 of the Financial Services and Markets Act (FSMA), which allows the FCA to investigate firms when it is not satisfied about the business’ ability to remediate its failings.
The FOI also revealed that the advice firms had to pay a total of £303,270 ($385,076, €340,915) for the reviews, as they are responsible for bearing the costs.
“We are, however, unable to disclose the cost of each individual review, as this may lead to the identification of some of the firms concerned, and the disclosure of confidential information that the FCA has received while carrying out its public function,” the watchdog said.
It added that the sums paid by the individual firms may span more than one financial year.
Similarly, the FCA told IA it could not reveal the outcomes of the seven reviews, again for confidentiality reasons.
“We are unable to disclose […] because the findings of each review are firm–specific, and their disclosure may lead to the identification of the firms concerned,” the regulator said.
The latest skilled persons report statistics from business advisory firm Duff & Phelps show that there were a total of 57 reviews in 2019-20, a 68% increase from the previous financial year.
But figures for retail investments and pensions were relatively low, with five reviews for the former and only one for the latter.
IA reported on 8 June that the latest firm to face a skilled persons report is advice company Lighthouse, which was acquired by Quilter in April 2019, after the FCA found issues relating to its legacy of defined benefit (DB) pension transfers.