UK financial watchdog says 73 pct of advisers fail to come clean on costs
LONDON, April 7
LONDON, April 7 (Reuters) - Three quarters of financial advisers in Britain are failing to keep their clients properly informed on how much they are being charged for investments they buy, the UK's financial watchdog said.
In a review of the financial advice industry released on Monday, Britain's Financial Conduct Authority said it is likely to refer one advisory firm and a wealth manager to its Enforcement and Financial Crime Division for "egregious failings".
The FCA did not name the two firms.
The review, the second of three, marks a health check on how advisers are selling investments to individuals following a raft of reforms introduced at the start of 2013 including stricter rules on transparency and disclosure.
"I am disappointed with the results of our latest review looking at whether advisors are clear with their customers on costs and services provided," said Clive Adamson, director of supervision at the FCA.
"These results are a wake-up call and we expect the industry to respond."
The regulator said it will carry out another review in the third quarter of the year and firms found to still fall short of the disclosure rules could be referred for punishment, potentially involving fines.
The FCA added that wealth managers and private banks, serving richer clients, were among the worst offenders although failings were "widespread across the industry." (Reporting by Chris Vellacott; editing by Keiron Henderson)