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Review of adviser capital adequacy

November 18, 2020

What is happening?

During November 2020, the FCA is asking advisers for details of their outstanding FOS complaints and potential legal liabilities as part of an investigation into the capital adequacy of the sector. A survey has been sent to adviser firms asking them how much redress they could have to pay out if FOS claims go against them, and how their PI policies would meet such claims.

The FCA is also asking firms for information on their overall operational resilience, including in areas such as data security and termination rights.

What do you need to do?

Firms have been given seven days to fill in the survey, which also required them to input their estimated capital buffers from August 2020 to July 2021. The survey asks firms to provide an estimate of “worst case” and “expectation” figures on the estimated value of their outstanding FOS complaints, along with the value of redress liabilities both on and off the firm’s balance sheet. Advisers must also provide an explanation for the FOS cases against them and a separate explanation of other potential redress liabilities.

How can we help you?

If you’d like to know more about how we can help you with your capital adequacy arrangements, FCA investigations or with any other aspect of FCA compliance, our expert team is here to help. Contact us today on 0207 436 0630 – or email info@thistleinitiatives.co.uk.