Managing the FCA’s latest data request

Completing requests

While many advice professionals will feel they have better things to do than submit more data, those with technology integrated into their proposition can at least take heart that the job is far simpler than in the days of riffling through filing cabinets and scouring email chains.

Successfully completing data requests depends on firms having detailed, accurate client information. Your business management system should support this process, using user-defined categories such as business type, life stage, demographic profile, and wealth level.

Capturing detailed client information will also help with identifying and supporting vulnerable clients, already a key element of Consumer Duty. The right system will include markers and integrated customer assessment software to help advisers recognise and document vulnerable and potentially vulnerable clients. These tools support your vulnerable client policy by enabling clear, auditable tracking of vulnerability discussions and decisions, especially important given the often nuanced and evolving nature of vulnerability.

Embedding compliance into workflows

The FCA states that the data it has requested should be readily available and easily accessible, but that relies on having the right processes in place to record the correct information.

We know that most firms are focused on delivering good outcomes and operating within the rules. In our conversations with advisers, it’s clear that much of the anxiety around these sweeping data requests stems from uncertainty about how well data is recorded.

The best defence against regulatory pressure is a proactive, rather than reactive, approach to compliance. The technology already exists to support you, and embedding compliance into everyday workflows as a natural part of your client service will help remove some of the stress from data requests.

To access the data, dashboards provide a comprehensive business, client and operational overview, while for more granular insight, firms can extract data directly into Excel. Your practice management system can highlight missing fields so gaps can be corrected retrospectively, ensuring records are complete and compliant.

Delving into the data

Having the right systems and processes in place is essential to responding effectively, but it’s also important to understand the regulator’s rationale for the data request, areas of focus and what this could mean for the sector. The FCA’s data request is not just a box-ticking exercise. It offers a window into the regulator’s priorities, highlighting themes such as diversity, client vulnerability, and generational shifts that could shape the sector’s evolution.

One specific area of interest is female representation within advice firms and their client bases. This focus signals that firms may need to consider not just compliance, but also how they foster inclusivity within their workforce and client base.

According to the lang cat’s latest State of the Advice Nation research, just 29% of advice professionals are women, while our Advice Map of the UK analysis tells us that currently 43% of advised clients are female.

However, ownership of wealth is becoming more diversified. The great wealth transfer is expected to shift trillions of pounds of assets globally into the hands of women and younger people over the next five years. Recent research by Unbiased found that UK women are already 45% more likely to have inherited assets than men. The question around female representation suggests that the FCA is probing how well the profession supports female clients and whether more should be done to encourage women into advice roles.

The questionnaire also asks about client age ranges. We know that advised clients tend to be older – intelliflo’s Advice Map of the UK tells us that just 12% are under 40, while two-thirds are 50 to 79. The FCA has previously warned about finfluencers encouraging younger people to buy high-risk investments, and the data request asks about sourcing new clients, which points to the regulator wanting to understand how firms are engaging with younger people, who will also benefit from the wealth transfer.

Another key area is vulnerable clients. Identifying those with characteristics of vulnerability remains a major focus. Beyond identification, firms must implement appropriate strategies to support good outcomes. The challenge is that vulnerability is broad, and client circumstances change. Firms need robust processes to detect changes that could lead to financial, physical, emotional or mental vulnerability, and take action immediately, rather than waiting until the next annual review. According to its 2024 Financial Lives Survey, 49% of UK adults showed one or more characteristics of vulnerability, making it highly unlikely that any firm has no vulnerable clients. Given the broad and evolving nature of vulnerability, firms will benefit from the proactive compliance frameworks discussed earlier to adapt swiftly and safeguard client outcomes.

From previous FCA communications, it appears some of this data will provide further context for information the regulator already holds. The overall aim is to spot potential consumer harms, assess whether further supervisory work is required and identify any actions a firm may need to take, as well as trends that could prompt future thematic reviews, good practice guides, or rule changes.

Ultimately, the FCA’s ongoing scrutiny underscores the importance of robust, tech-enabled data practices, not just to satisfy regulators but to deliver meaningful value for clients. Firms embracing this approach will be best positioned to navigate future challenges and opportunities with confidence.

This article was first published in IFA Magazine on 16 July. Please find a link to the original piece here.