The Model Office Blog

Financial Advice Working Group and Model Office#RegTech

[fa icon="calendar"] Apr 12, 2017 10:34:31 PM / by Chris Davies

One thing is clear, there is real momentum underway within the retail investment advice  market towards more client-centric business models that will make both products and services easy to access, affordable and compliant.

As we see it, Treating Customers Fairly, Know Your Customer and Customer Best interest rules are at the heart of retail investment advice (RIA) firms professional development thus Model Office – MO’s #RegTech platform is now calibrating the Financial Advice Working Group and HM Treasury key findings into the platform as part of our Q2 updates.

MO calibrates the FCA rules, key published papers and associated directives into its platform and makes it easier and more cost effective for firms to assess their compliance and professional development journey. We are currently please to be supporting Prestwood Group business development workshops details of which can be found here

What are the key Q2 updates?

  1. HMT: Advice definition: In our blog #RegTech and the definition of advice, we assessed the move to the MiFID advice definition of advice as a personal recommendation and agreed that this would provide much-needed clarity and opportunity to regulated firms. MO then assesses RIA firms understanding of the new advice definition and how this can aid more support and client understanding of planning opportunities and challenges
  2. FAWG outputs:
    1. Advice and Guidance: In the final report FAWG attempts to clarify advice and guidance in offering explanations and new terms that can be applied. There is some good work here and MO is interested in how firms are applying such terms to their service propositions and tests for understanding and application of the regulatory signposts and terminology used to ensure clarity between the terms and associated services
    2. Workplace as a centre of influence: How RIAs can support employers to offer meaningful financial information and guidance
  3. FAMR progress report: There are 3 key areas to this initiative and MO has focused on the following:
    1. Affordability:
      1. Advice Fees: MO tests for application of a advice fee strategy that offers client value and meets affordability criteria
      2. Streamlined advice: MO’s Your Promise Key Focuses on technology as an enabler tool providing efficiencies and economies of scale to firms client propositions
      3. Clear advice framework: MO’s Your People key brings training and competence into focus
      4. Cross-subsidisation: MO tests adviser charging strategy to ensure this is clear and clean and meets FCA rules
      5. MiFID II implementation: MO tests for understanding and application of key MiFID II directives such as appropriateness/suitability/research/disclosure/segmentation and how this can aid streamlined propositions
      6. Suitability reports: MO tests for simplicity and terminology calibrating to regulatory and professional body guidance
      7. Fact finding: Ensures soft facts are covered and recorded
    2. Accessibility:
      1. Employee health check: MO assesses how firms are developing this strategy
      2. Adviser charging rules: MO tests for understanding for flexibilities such as instalment payments
      3. Behavioural science: MO uses nudges and steers to provide firms with resources to improve their scores and understanding and thus a benchmark that can be used of clients
    3. Liabilities and Redress:
      1. PI Insurance: MO incorporates many PI questions and risk management strategies with the focus on providing high quality MI for firms to potentially reduce PI costs 

In summary, MO constantly evaluates the regulatory and market climate and applies key directives and research to the platform so RIA firms can benchmark their compliance and professional development progress on a continuous basis.

Please click the below icon link to MO's platform and learn more about MO today..

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Topics: Benchmark, compliance, client centric, Financial regulation, Financial business development, fintech, Human resource development, client engagement, regtech, Constructive compliance, Risk management, practice management, FCA, advice, mifid, HMT, suitability, FAWG, FAMR

Chris Davies

Written by Chris Davies