Making the most of the new FCA Directory
Times are changing in the land of financial services regulation.
The introduction of the Senior Managers & Certification Regime (SM&CR) for financial advisers on 9th December is coinciding with changes to the Financial Services Register.
It’s been a long-debated subject, with earlier plans suggesting many individual advisers wouldn’t appear on this public-facing directory of regulated firms.
But now the FCA has announced plans to make a new Directory available through the Financial Services Register.
The Directory will include details of advisers who are no longer listed on the Register, due to not holding senior manager roles under SM&CR. It will also show members of the public some further details about individual advisers, not currently captured by the Register.
It will show relevant roles held by the individual, types of business the individual is qualified to undertake (including categories like retail investment adviser and pension transfer specialist), customer engagement methods (face-to-face or over the phone), and memberships of relevant accredited bodies.
When the Directory goes live on 9th December, firms will be able to submit all of this data via FCA Connect. They will also need to keep it up to date.
Our conversations with Financial Planners suggest that the larger adviser directories are becoming less effective as a source of new client enquiries. Their algorithms appear to be changing in some cases, making it harder for advisers to rely on them as a source of new business.
We have long been advocates of not relying on adviser directories for leads, instead taking control of your marketing and prospecting.
Putting the volume and quality of prospective client enquiries in the hands of a third-party is a bad idea for a couple of reasons.
Firstly, they are typically promoting a very generic financial advice proposition, rather than your unique value proposition. This is especially problematic for Financial Planners, as a traditional IFA proposition fails to describe what they do for their clients adequately.
When a consumer buys into this generic proposition promoted by the directory, to get them through your door (and then engaged in using your services) becomes an uphill struggle.
Secondly, as we’ve seen in recent months, the systems behind these directories can turn on a dime. This can result in a rapid decline in the volume or quality of new enquiries, through no fault of your own.
When your business is dependent on engaging with a certain number of clients each year, any change to this figure can result in difficult decisions, including in some cases cutting back on support services or staff roles.
The new FCA Directory will, of course, be different from the commercial adviser directories on the market. It’s not a directory designed to generate client leads, but a trusted source of information about the status of regulated advisers.
This means it’s essential (and a regulatory requirement!) for firms to upload and the update accurate information about their advisers from December onwards.
Firms will have until 9th December 2020 to upload their data, hence this article accusing the FCA of ‘Baldrick-levels of stupidity’, but you would be crazy (in my opinion) to leave it more than a few days after 9th December 2019.
We will be encouraging our clients to go a step further and add links to the profiles of individual Financial Planners on their website back to that individual on the Directory.
Rather than making your prospective clients search for this official validation of your status, make it as easy as possible to cross-check.
Encouraging prospective clients to carry out due-diligence before engaging with you – and give them the resources or links to get this done – will set you apart from the competition and helps to build trust before that first contact takes place.