The Financial Conduct Authority (FCA) is looking at bringing back reporting on a cash-basis for advisory firms in their Retail Mediation Activities Returns (RMAR), its head of savings, investments and distribution said today.
David Geale said the regulator would look at aligning advisers' accounting methods to make it easier for them to submit their data, after it realised new RMAR reporting had caused concerns in the industry.
He said the regulator realised the new rules, brought in after the Retail Distribution Review (RDR), had not achieved its "desired effect" of making it clear and easy for firms to report their RMARs and that it was looking to "fix" that.
Geale said: "For the next year we will look to make [filing accounts data] easier so [firms] can do it on one consistent basis.
"We are looking at whether, if they use an accruals basis or a cash basis, they would actually report on that same basis to us, rather than doing it one way for us and one way for HMRC. That's what we are looking at with a view to bringing that in next year."
The FCA also issued an interim technical note on 'section k' today to give advisers some "immediate support" on their RMARs after admitting it had got things wrong.
"We are conscious of the fact that we ask firms to report a lot of data and that's why we changed the way we recorded data last year. With the benefit of a hindsight it's now apparent that those changes didn't have the desired effect so what we are doing is moving quickly to help advisers.
"Longer term we are going to consider bringing that guidance into our handbook so it's there with permanent effect," Geale said.
Advisers hit out in September at the overhauled reporting requirements for RMARs, saying they were "burdensome", "nonsensical" and even open to abuse.
They were particularly unhappy about two new sections that were introduced - Section K: Adviser charges and Section L: Consultancy charges.
They argued that the FCA's guidelines were incoherent and inconsistent, and it was unclear what type of accounting practice was permissible for which pieces of data.
They also questioned the effectiveness of RMARs in terms of the type of data that was asked of them.
Geale defended the regulator's data collection, saying the data formed the basis for regulation and helped the regulator monitor and challenge the way firms are implementing rules.
He said: "We think very hard about the data that we do request of firms because we are conscious that it is a burden for them, however we need to be able to supervise a large number of firms in quite an effective way."
He added: "A lot of these firms are small firms and data is a core part of enabling us to spot issues before they occur or spot what's going on in firms. And in particular with these requirements it's about us monitoring firms' compliance with the adviser charging rules that were brought in with RDR."
The FCA's data strategy, published in September, said it would look into the way it collects and handles data, and how it communicates this with firms.
It announced that it would look into the retail investment space first, meaning advisers could be the first to benefit from any improvements but also face being used as a test case to see whether its new information-gathering strategy is working.
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