As the waiting game begins for the British Financial Conduct Authority’s upcoming business plan, Jason Wintie, director of compliance at the Consulting Consortium, predicts a regulatory shift in focus.

The 'due diligence' process among independent financial advisors is likely to be a vital area of scrutiny for the Financial Conduct Authority in the year ahead, according to Jason Wintie, the head of regulation at the firm. With the regulator now largely content that firms are generally adhering to the new rules under the Retail Distribution Review (RDR), he believes that in its business plan the FCA's focus will shift to more specific areas in which firms manage the risks to their business models. 

He predicted: “A particular area of focus is likely to be around proposition design. Whether firms are effectively segmenting their customer base, how they check that the product/service they provide is right for their customer segments and how independent advisers who are also shareholders of platforms manage the conflicts of interest this creates, are areas where the FCA will be casting its eye.

“There is concern that biases already present in firms’ business models and strategy in regards to platform selection could affect the sales process and fair treatment of customers. In line with expectations of the regulator, firms should already be taking steps to monitor the levels of business they place with product providers and platforms in order to assess whether they are delivering the service promised to customers.” 

The Consulting Consortium believes that the FCA business plan will be announced within the next two weeks "to ensure that it falls within purdah."