FCA has written a portfolio letter to debt advice firms. The letter follows the usual format of setting out key risks and regulatory expectations, and explaining FCA’s supervisory strategy. It considers the key risks as:
- inablity of consumers to access debt advice when needed because of insufficient capacity in the sector;
- inadequate governance and controls over advice processes resulting in poor advice and consumers entering into arrangements that are not in their best interests;
- poor controls over fee structures leading to consumers paying too much – it is particularly worried about the debt packager market;
- inaccurate reporting data hindering FCA’s ability to supervise; and
- firms having insufficient financial resources.