The Financial Conduct Authority’s latest review into disclosure by advisers found 73 per cent failed to provide the required information on the cost of advice and some may even be misleading customers.
Wealth managers and private banks performed worse than other companies. One wealth manager and one financial advisory firm will be referred to the FCA’s enforcement and financial crime division after “egregious failings” were uncovered.
I am disappointed with the results of our latest review. They are a wake-up call and we expect the industry to respond
The latest review is the second of three assessments of how firms have implemented disclosure elements of the Retail Distribution Review, which came into effect last year.
The RDR reforms abolished commission and required that upfront fees are set out clearly.
FCA director of supervision Clive Adamson said: “I am disappointed with the results of our latest review. They are a wake-up call and we expect the industry to respond.”
The watchdog said if firms are not complying with disclosure rules by the time the third cycle of its review gets under way in the third quarter of 2014, it will consider “further regulatory action, including referrals to enforcement”.