Two-thirds of advisers have made changes to their processes as a result of the FCA’s retirement income thematic review.
According to a poll by Wesleyan, 91 per cent of advisers who were familiar with the FCA’s findings have reviewed their advice processes and 66 per cent have already made changes as a result.
The most common findings included introducing or changing advice file record-keeping (64 per cent), while 60 per cent of advisers have introduced or changed their client screening processes.
While 45 per cent have altered the way they segment their clients to offer more suitable services.
Some 27 per cent of respondents said while they had not made changes to their processes yet, they planned to do so.
Overall, 78 per cent of advisers agreed the thematic review has increased the industry’s focus on providing better, more suitable retirement advice.
Karen Blatchford, managing director of intermediary distribution, said: “Advisers are being diligent and acting in line with the review’s principles to make sure they’re delivering the best possible outcomes for clients. Revisiting and improving processes will also support firms’ ongoing compliance with the consumer duty.”
The research also found 90 per cent of advisers have helped clients who are at or nearing retirement adjust their asset allocation in response to the FCA’s findings.
According to the poll, the most popular steps taken have been to increase bond allocation (55 per cent), followed by decreasing equities allocation (40 per cent).
“The regulator remains focused on ensuring consumers can access investments that suit their attitude to risk and circumstances.
“Alongside changing asset allocation, advisers have a real opportunity to use specialist funds to help further improve suitability.
“This includes smoothed funds, which use an actuarial mechanism to hold back some returns during periods of strong fund performance that are then re-distributed during periods of weaker performance.
“This supports clients who may benefit from greater exposure to markets but want to help moderate risk and reduce volatility,” Blatchford added.
alina.khan@ft.com
