The Financial Conduct Authority (FCA) is working to dispel the 'myths' that have built up over the regulator's expectations of advisers and paraplanners, such as the length of suitability reports.
Rory Percival (pictured), technical specialist at the FCA, speaking at the Institute of Financial Planning paraplanner conference, said that the FCA was still working on how to better communicate with adviser firms on what it wanted from them.
He said: 'There is still a legacy of concern about the regulator's expectations and we are very mindful of that. You might say that we have not communicated our expectations as clearly as we could have done in the past but we're trying to address that now.'
He said that along with presenting at events and clearer, more frequent communications on the FCA's website, the regulator was trying to find new ways of engaging with smaller firms.
He added: 'It is a key focus for us going forward because for a number of firms our expectations come filtered through a number of people...There are all these myths that build up about things we do not what we require and some of those myths generate situations that could be detrimental to the client.'
Percival reiterated that it was a 'myth' that there was a disconnect between the FCA and the Financial Ombudsman Service, which he first challenged in November 2014. He welcomed examples from advisers that showed FOS decisions that were not aligned to FCA policy.
One area that Percival was specifically addressing to paraplanners was the length and quality of suitability reports.
He said that firms too often throw in the client's whole file into a suitability report when it really needed to be a concise, approachable letter personalised to the client.
Percival said: ‘There are only three things that need to be in a suitably report. One is the client's demands and needs, or their objectives, next one is why it’s suitable for that specific client and the risks.'