Is there a clean bill of health when it comes to ongoing advice?

This article was originally published in Money Marketing on 28 March 2025.

The publication of the Financial Conduct Authority’s findings on firms’ provision of ongoing advice and services has already generated many column inches.

The headline that grabbed most attention has rightly been hailed as a positive outcome for the advice sector. Based on the data from 22 of the largest advice firms, 83% of ongoing advice and services was provided; and, in a further 15% of cases, clients declined or did not respond to firms seeking to provide these services.

It is difficult to say if this is a surprise or not. On one hand, many firms will indignantly say, ‘Of course we provide the services that we have contracted to provide and charged for.’ On the other hand, the FCA must have had concerns in this area and may have expected a different outcome.

There is also the fact that several firms have publicly made significant provision in their accounts for liabilities in this area, with claims-management firms continuing to circle (the regulator is at pains to point out that using such a firm is not necessary).

Softer line

What does this tell us? Possibly that any significant issue in this area may be limited to a smaller number of firms than expected (i.e. it is not a significant sector-wide problem).

For all firms, however, there are still some useful points to take away from the FCA’s findings.

First, where a firm has not provided its ongoing services despite attempts to do so, the regulator has taken a softer line than many may have expected, saying that it expects “redress to be less likely” in such situations. This is not a completely free pass, however.

Understandably, and consistent with Consumer Duty principles, the FCA expects firms to consider at what point they should stop charging for services that a client does not appear to want to engage with. You cannot simply continue charging for a service that a client consistently declines or fails to engage with. It would be sensible for all firms to have a policy to deal with such scenarios (and then, of course, to follow that policy).

The regulator’s findings make it clear that there is a range of ongoing services that firms agree to provide to clients and charge for. The FCA also notes that client agreements and other communications are often not clear about which ongoing services are being provided to clients, and why.

This is consistent with my own experience. I have seen several examples of firms’ client agreements where the nature of the ongoing services is unclear. This is not usually deliberate, and often applies to a firm that is nevertheless delivering a good and valuable service to its clients.

I always think it is worth asking a ‘consumer’ from outside the firm to read the client agreement — particularly the key sections around services to be provided — and say if it is clear what the firm will do. Those inside the firm can potentially be too close to it.

Fair value?

Related to the above, the other issue that all firms should be considering — and which the FCA will inevitably look at closely — is whether and how their ongoing services represent fair value to the client.

Value is to an extent subjective, and most clients who have an ongoing relationship with a financial adviser appear to value the reassurance that brings.

But firms should not rest on their laurels in this area. Those that are continually considering how to provide better value to clients will stay ahead, both in the race to retain clients and grow their business and in terms of regulatory intervention.

So, not a completely clean bill of health for the sector, but overall a very positive result indeed.

With the FCA also appearing to (surprisingly enthusiastically) embrace the new government’s growth agenda and talk about reducing the regulatory burden, is this a good time to be a financial adviser?