The FCA’s Debbie Gupta delivered an impassioned and heartfelt keynote at the climax of Dynamic Planner’s 2020 Annual Conference, at the IET in London.

The industry regulator’s Director of Life Insurance and Financial Advice Supervision presented to delegates for approximately 20 minutes before opening things up and taking questions from the audience.

Debbie was relaxed on stage; she understood the day-to-day problems and frustrations faced by advice firms; and she spoke candidly, intelligently and maturely in a compelling conclusion to what was a great occasion.

Much of the discussion returned to the critical issue for firms’ clients of pension transfers and ensuring a suitable income in retirement – and a retirement today which is more demanding and complex perhaps than for people of previous generations.

Debbie Gupta FCA presents at Dynamic Planner Conference

“Consumers are increasingly facing uncertainty about later life – changes to their health and their life expectancy,” Debbie told delegates in London. “We are living and working for longer, and we have to really think carefully about how we provide ourselves with an income later in life.”

She continued: “With the arrival of pension freedoms, consumers are having to make a series of increasingly complex decisions – and how do you make good decisions alongside a drive forward in technology and changing expectations?”

Debbie powerfully outlined and described how, for most people, the point when they retire is the key financial moment in their life – and naturally the moment when suitable professional financial advice is most valuable to them.

She said: “A pension, of course, is typically a person’s biggest asset, representing for them a relatively enormous amount of money. But managing that money is not easy, which is why what advice firms do is so critical and becoming ever more important.

“How do firms best ‘know their clients’? Firms who succeed here realise how critical a customer fact find is and demonstrate evidence supporting it. However, not all firms do that and we are still seeing DB transfer advice where they have not recorded, for example, other pension details, state pension details or indeed what a client’s expected income might be in retirement.

“The best firms capture this information, they contextualise and they tell a client’s story – and they demonstrate evidence why advice given is suitable.”

Speaking in the IET’s Kelvin Lecture Theatre, Debbie continued: “Seeing firms really transform their relationships with clients and evidencing clearly how they have done so – that’s, at the FCA, what we want to see going forward.

Debbie Gupta FCA presents at Dynamic Planner Conference

“While it’s not an FCA requirement, one way we’ve seen firms transform how they approach fact finds is by recording interactions with clients, which are often the most robust evidence a firm has, for example, in the event of a complaint. Recordings help firms hear the client’s voice and the context of their language and phrasing.”

There was a wonderful hush in the day’s final session at the IET on 5 February – a clear and very real sense in the theatre that it we were all sat in privileged seats to hear, first-hand, thoughts from a key figure from the regulator. Debbie herself treated the stage and audience with enormous respect. It was great to see and to experience.

The Director of Life Insurance and Financial Advice Supervision urged representatives of advice firms present to not be afraid of challenging their clients, when they fear a stated aim or desire is not ultimately in their best interests.

She said: “We see many examples of firms detailing what a client wants in fact finds, but do they also consider what that client really needs? Because many client ‘wants’ are based on flawed assumptions or a lack of understanding of potential risks – for example, the future impact of inflation.

“Establishing income needs in retirement is critical and challenging a client’s misconceptions is where a firm can add real value. Advice firms are the experts here.”

Writing in Dynamic Planner’s 2020 London Conference Magazine, which all delegates received upon arrival, Debbie underlined: “The biggest challenge for firms is to ensure through evidence that they really do know their client. Good financial advice focuses on what clients really need to achieve.

Debbie Gupta FCA Dynamic Planner Conference Magazine

“What singles out good firms is the evidence they retain to demonstrate that they have thoroughly assessed their client’s needs and objectives. They have gone beyond the words and actively listened to what is being said; they have taken a holistic view of the client’s needs; and, where appropriate, they have educated the client or challenged them when it is clear that their wishes are not in line with their needs.”

“Every bit of advice, whether initial or ongoing, relates to a unique individual and advice should be personalised to reflect this. The more your fact find records everything relevant and the more specific it is – the easier it will be to evidence the suitability of your advice.”

Later, during open questions and answers from the audience, the Dynamic Planner 2020 Conference host Simon Jack pointedly asked Debbie, ‘Were pension freedoms a mistake?’

She answered: “It is a difficult question to answer here on this stage and you can see why pension freedoms, of themselves, were good and well intentioned – but in almost all cases, transferring out of a DB scheme is not in the best interests of the client.”

During her talk, Debbie continually reminded the audience that the person on the street, the clients of advice firms, was very firmly always forefront of the FCA’s thinking and policy.

She said: “It is easy to leave a talk like this and think it is all doom and gloom. I want to reposition that thinking, because the regulator is in a unique and privileged position to see what ‘really good’ looks like within the industry and also understand that there is really bad practice going on as well.”

She continued: “The FCA is here to serve the public interest – a remit which comes with both a great deal of responsibility and a huge challenge. It is often said that the FCA is slow to act – but I would say instead that we’re thoughtful, deliberate and careful. That is absolutely the right way to respond to those challenges. I know that can feel frustrating sometimes, but it’s important that we take care in how we work and that firms have time to respond and engage with us.

“Our focus on consumers is unwavering and we are increasingly focusing our efforts on the financial advice sector.”

In a final question, in the interview which appeared concurrently in the 2020 Dynamic Planner London Conference Magazine, Debbie was asked, ‘What is the best piece of advice you have ever received?’

She said: “Keep asking yourself, ‘What is the problem I am trying to solve?’ because sometimes it’s easy to get lost in the complexity of the challenge. It’s so simple it’s almost silly, but staying focused on the big picture is the best way of making sure you’re headed in the right direction – especially when you can’t see through to the other side.”

Where does the value in adopting Dynamic Planner lie for your firm? Find out at Dynamic Planner’s 2020 events