The financial services regulator and government have a number of measures they could take to help the profession help clients and members of the public in need of financial advice during the current economic uncertainty.
The Personal Finance Society said it has written to the Financial Conduct Authority and HM Treasury suggesting changes to regulatory requirements that would allow financial advisers to continue working during a period when demand for their help has never been greater, yet pressure on their own resources are stretched.
The PFS said it has asked the FCA to confirm that government business loans will not breach a firm’s capital adequacy requirements as well as the introduction of a four-month waiver for advice firms searching for professional indemnity insurance.
The professional body said the there is evidence availability of cover continues to reduce and renewals are being “seriously impacted” by current lockdown measures introduced by the government to slowdown the spread of coronavirus.
The PFS has also asked for HM Treasury to consider acting as reinsurer of last resort for professional indemnity insurance ahead of a wider PII/Financial Services Compensation Scheme funding review.
An extension of the 48-month deadline for advisers to become qualified while giving advice under supervision has also been requested by the PFS.
The professional body said the key points in its letter to the FCA are:
- The FCA should push back the deadline for registering advisers on their directory from December 2020 to December 2021
- Given the postponement of examination sittings as a result of government guidance, the FCA should push back the deadline for Pensions Transfer specialists to achieve Retail Distribution Review required qualifications. The deadline is currently 1 October 2020
- The City watchdog should issue communications to the public about the importance of not over-reacting to investment market behaviours during the coronavirus outbreak and seek guidance or advice
- A lighter touch should be taken to the implementation of the Senior Managers Certification Regime
- There should be a relaxing of regulatory financial returns requirements
PFS chief executive Keith Richards said we are living in “unprecedented” times and in order to meet the demand for more financial advice from impacted consumers, advisers will need help from the government and regulator.
He said: “The impact of COVID-19 will make it virtually impossible for financial advisers to talk to clients face-to-face, with the majority now having to reassure clients and help them with their needs over the telephone or internet, while contending with their own personal challenges.
“Over the coming months, the focus for all stakeholders must be on maximising the amount of time advisers can spend dealing with client needs, especially those in desperate need of the profession’s help.”