Compliance teams are utilising technology to keep a closer eye on advisers' written business, writes Peter Bradshaw, national accounts director at Selectapension.
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Providing evidence is one of the main activities for compliance departments. Consequently, many financial organisations and networks are equipping their compliance teams with technology in order to have greater control over their firm’s activity. For example, technology can show which advisers take remuneration and which do not.
One of the requirements of RDR is that advisers have to prove they have undertaken the necessary professional development. Firms are also responsible for keeping records for individual advisers and need to supply the FCA with data about individual advisers’ professional standards. Additionally, firms need to be ready to notify the FCA if any financial adviser falls below the required standard of competence or ethical behaviour.
Using technology to keep on top of compliance
With this pressure, compliance officers cannot afford to run the risk of falling behind in documentation.
Businesses also need to show evidence of record-keeping. Traditionally, this can take a large amount of time, which is difficult for firms to assign resource to. Technology can help with reporting and keeping data all in one place. For example, this is important when it comes to pension liberation as compliance needs to have oversight of what their colleagues are producing.
There is a growing trend towards greater dependence on technology. Many use back office systems to keep records all in one place and most firms source these systems from an external provider.
The key to compliance is adopting the right technology to ensure data is all in one place. Having systems that can check and store data will ensure compliance teams can adapt to the demands of the FCA.
It is likely that the emphasis on standardising processes, reporting and producing evidence will continue under the spotlight of the FCA and financial advice firms – and their advisers – will need to be ready for this.
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FCA crackdown: Compliance heads banned for failing to stem improper UCIS sales
John Leslie, of advisory firm Leslie & Nuding (now Leslie & Swallow), and Jeffrey Bennett, of Burlington Associates, who were responsible for overseeing the regulated activities of their respective outfits, failed to warn their firms as advisers recommended hundreds of clients invest a combined £30m in three failing UCIS in 2005.
Following investigation, the FCA found that Leslie and Bennett failed to exercise due skill, care and diligence in their positions. They did not identify the extent to which their firms were involved in promoting the UCIS, nor did they detect the risk that the schemes may be promoted to ineligible consumers, the regulator said.
FCA head of retail enforcement Bill Sillett said: “The lax attitude of Leslie and Bennett to their duties was particularly unacceptable when you consider that their firms were involved in promoting the UCIS to thousands of mainstream retail consumers.”
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