l SMCR to Hit Solo-Regulated Advice Firms | SMCR Compliance

SMCR burden to hit solo-regulated advice firms hardest

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The introduction of the Senior Managers & Certification Regime (SMCR) is intended to increase transparency and accountability within the UK financial services sector. But, during the transition to this model, financial advisers and advice firms could have to deal with a greater administrative burden.

This is because, from 9 December 2019, the Financial Conduct Authority (FCA) has stopped updating its register which is going to be replaced by a directory at the end of 2020. Solo-regulated firms, which fall under the purview of the FCA but not the Prudential Regulation Authority (PRA) have until 9 December 2020 to submit information under the SMCR.

This means that the status of some financial advisers on the FCA register could appear as “regulatory approval no longer required”. Arguably, this makes things more confusing for clients and potentially also the firms working with those advisers. The move has prompted Prudential UK to start asking the advisory firms it works with to self-report their regulatory status.

A spokesperson for Prudential UK told International Adviser: “Due to the recent changes to the Financial Services Register, and to make sure that we continue to accept business instructions only from appropriately authorised advisers, we are now asking adviser firms to let us know directly when advisers start or leave their business.

“As the Financial Services Register will no longer accurately show individual adviser data, we believe that this is likely to become standard practice across the industry.”