1. The Financial Conduct Authority (FCA) has published a guide to how it will measure advisers’ disclosure efforts against its expectations, after it detected “unacceptable” shortcomings in its latest post-Retail Distribution Review (RDR) work.
2. The regulator has produced an ‘assessment tool’ against which firms can check how they explain charges and their regulatory status to clients.
3. In the second part of a three-stage review into firms’ compliance with the RDR’s charging rules, the regulator found almost three quarters of firms were failing to disclose to clients the cost of advice adequately.
4. It also found problems with firms disclosing their independent or restricted status to clients, however most IFA firms are meeting its independence rules, it found.

The FCA called the findings a “wake-up call” for the industry.

1. The launch of the assessment tool is ahead of the regulator’s third review into RDR compliance, which will begin next month.
2. The FCA said it expects to see “significant improvements” or it will consider further regulatory action against firms. Two firms were put at risk of enforcement action following round two of the FCA’s follow-up work.
3. The FCA said it will use this template to assess disclosure in its upcoming work.

However, chief executive Martin Wheatley said last week firms may be granted “waivers to product disclosures that don’t follow FCA guidance to the letter”, if they can prove their way of disclosing charges are better for consumers.

The FCA’s tool is available in

• interactive Excel format http://www.fca.org.uk/your-fca/documents/disclosure-assessment-template-excel

and as a

• PDF checklist. http://www.fca.org.uk/your-fca/documents/disclosure-assessment-template-pdf

The above breaks down into six sections:

1.  standard charging structures;
2. specific charges for individual clients;
3. general disclosure requirements – initial and client specific;
4. disclosure of the scope of service the firm offers – whether it is independent or restricted;
5. disclosure of the ongoing services the firm offers;
6. and general disclosure requirements when describing the services offered by the firm.