A survey by Intelliflo, a British specialist software firm for financial advisors, has shown that compliance reporting far outstrips concerns about client-charging among advisers.

A survey by Intelliflo, a British specialist software firm for financial advisors, has shown that compliance reporting far outstrips concerns about client charging among advisers.

315 advisers ranked their biggest business challenges and Retail Mediation Activities Return reporting (combined with other compliance reporting) was at number one, with 24% listing it. Client-charging came fifth, with 11% of the vote.

Since the Financial Conduct Authority began to require advisors to provide data on payment methods into RMAR reporting last year, many have complained about the time-consuming burden it creates. Lisa Jones, from an independent financial adviser firm called Hargreaves & Jones Ltd in Surrey, said that she thought that the regulator had underestimated that burden: "The fact that product providers are all developing their own different systems adds to the problem for fully independent advisers like us, who are choosing products from across the market.”

Larger firms offering independent advice also find compliance requirements a headache, as every product-provider takes its own approach to reporting.

The 'top five adviser business challenges' were:

• compliance/RMAR reporting;
• the servicing of clients;
• the costs of running a business;
• the effort of attracting new clients; and
• client-charging.

The FCA (with its consultation paper 14/5) is in the middle of a consultative exercise in which it proposes to 'streamline' the questions on the RMAR's section K form to cover the following.

• Section 1 - Independent advice, looking at revenue from all initial adviser charges including initial, one-off and ad hoc adviser charges; revenue from 'ongoing' adviser charges; aggregate number of initial adviser charges payable as lump-sum payments or regular instalments due from retail clients within the reporting period. The section asks who pays these charges: retail clients directly, or product-providers or platforms indirectly.
• Section 2 - Restricted advice, looking at retail investment products revenue from all manner of adviser charges, payable in lump sums or instalments. This section also asks who pays.
• Section 3 - The number of independent, restricted and other 'ongoing' services provided, including figures to describe when everybody started and stopped paying
• Section 4 - Typical charging for both independent and restricted advice, looking at fixed fees, hourly fees, percentages of investments charged and other things, noting minimum and maximum payments in each category.

The FCA wants to collect this data every six months but, to ease the reporting burden for investment advice firms, it proposes to only collect 'adviser charging data' through Section K of the RMAR annually.