The FCA has issued a new section 165 information request to financial advice and wealth management firms as part of its transition toward a more data-driven regulator to ensure firms are delivering good outcomes as required by Consumer Duty.
As well as looking at governance processes the information requested includes details of:
- Remuneration demographics – i.e. how firms structure their reward systems
- How firms identify characteristics of vulnerabilities and support such clients
Following the blatant GDPR breech and other issues highlighted in last week’s Panorama programme the FCA should ask estate agents with in-house mortgage brokers these same 2 specific questions, amongst others.
With reference to the question of whether remuneration structures are too heavily biased on conveyancing and/or mortgage broking referrals estate agents should reflect on the fact that an important factor in the PPI scandal, when heavy fines were imposed on some banks by the then regulator, the FSA, was the size of rewards offered to bank staff who sold PPI.
On the second point characteristics of vulnerability include financial, physical, emotional, or situational factors that may affect a client’s ability to make informed decisions; using this FCA definition most FTBs would be classed as vulnerable and so services and communications should be tailored accordingly.
Although an estate agent is not required to assess vulnerability the mortgage broker is. It would be interesting to know what proportion of their FTB purchasers estate agents’ in-house brokers classified as vulnerable. This is now a historical detail which can easily be checked and so it would be useful to see whether or not in-house estate agent brokers are outliers.
