The lack of information relating to all financial advisers on the Financial Conduct Authority (FCA) register has caused adviser verification problems at adviser comparison site AdviserBook, according to its boss Ray Adams.
Adams was among the comparison website operators critical of the FCA’s register, which, since the recent Senior Managers and Certification Regime (SM&CR) came into effect, no longer lists individual advisers.
He said the changes, designed to pass adviser verification into the hands of senior managers, impacted AdviserBook’s ability to provide complete information to consumers.
AdviserBook pays the FCA £20,000 a year for data it uses on its website, but Adams said the regulator “is not sending the data it used to send”.
He said the regulator’s register is particularly problematic for verifying new advisers, as it no longer provides them with identification numbers: “At the moment there is not a definitive check-up [for] individuals there are of firms but… it just doesn’t say who all these advisers are, they just put the senior managers – it’s certainly not an ideal situation.”
He added: “The FCA needs to go in and look at the register. It is not fit for purpose at the moment, it wasn’t fit for purpose before and they’ve made it worse. If your ship is sinking because you’ve got a hole in it what you don’t do is make another hole while you’re trying to repair it.”
The FCA has defended criticism of its register by stating it is undergoing a transition to a new directory, expected to be complete by the end of the calendar year.
VouchedFor, which lists individual advisers’ verification statuses, is in the process of changing its website to account for the FCA register changes post SM&CR.
“The FCA needs to go in and look at the register. It is not fit for purpose at the moment, it wasn’t fit for purpose before and they’ve made it worse. If your ship is sinking because you’ve got a hole in it what you don’t do is make another hole while you’re trying to repair it.”
VouchedFor managing director Alex Whitson noticed an uplift in clients using his website after the FCA revised its register, with anecdotal reports its linked to the regulator.
“Our website traffic is over 3% up on where I’d expect it to be after stripping out the effects of seasonality. Anecdotally, the changes to the register is certainly a factor in more people turning to VouchedFor to check individual advisers are properly authorised,” he said.
Whitson echoed Adams’ sentiment that the FCA register has created a “black spot” of comprehensive information about individual advisers.
“When the FCA register included all financial advisers, we’d check each of them against the register, but since December 2019 that’s only possible for those advisers who are senior managers, so there’s this black spot for 12 months where prospects, clients, providers, prospective employees don’t have a kind of independent site to check that an adviser who isn’t the senior manager has the necessary permissions to practice,” he said.
As the SM&CR came into effect, some advisers claimed the revised FCA register aided scammers by reducing ways for the public to check the validity of advisers.
Another adviser comparison site Unbiased agreed that the FCA register could be more comprehensive.
“We like many others in the industry are disappointed that the FCA have chosen to reduce the level of regulatory information available and hope this is addressed in the next version of the database available from the FCA,” Unbiased director strategy and marketing Frances Knight said.
He added that consumers using Unbaised could be confident the firms on the site had at least one adviser who had the “relevant authorisations to run a regulated business and give advice”.
This article originally appeared on Professional Adviser on 14 February 2020.