Recording Financial Advice Meetings

Recording Financial Advice Meetings.

The financial industry regulator, the Financial Conduct Authority (FCA), has confirmed that financial advisers will not be required to record client meetings and discussions.

New European rules start in January 2017 requiring many areas of finance to record all meetings and telephone calls. This is the second Markets in Financial Directive (MiFID II) and will require many higher risk areas to keep records in order to reduce fraud and protect the consumer.

What Prompted MiFID II?

Many of you may have read about or watched on television the issues of some city bankers being jailed for fixing LIBOR rates. These are interest rates when banks lend money to each other and have a direct effect on the consumer when we borrow money.

For example Commercial Bank A lends money to Mortgage Bank B, Mortgage Bank B then lends money to you at an inflated interest rate because it has borrowed money at an inflated rate. Rate fixing prompted a series of high-profile banking group resignations last year and indeed last week another banker was jailed.

This is why the new directive has been introduced. To prevent market abuse, certain higher risk areas of finance will now be required to record all discussions, meetings, telephone conversations and no doubt instant messaging services.

You will still have the right to request a copy of any recorded calls or discussions if you are affected by this.

Comment

We are delighted with the move by the regulator to not require financial advisers to also comply with the recording requirements for all meetings as this may put off many consumers as well as increasing costs on financial firms which, in turn get passed onto the consumer.

That said, we still do record higher risk financial advice discussions, for example where we have advised a client not to transfer their final salary pension scheme but then they insist on doing this therefore, giving up guaranteed pension rights and transferring to e.g. a flexible drawdown pension which has no guarantees and has significantly increased investment risks.