FCA to send advisers another Covid-19 impact survey

The FCA will send out another Covid-19 impact survey to advisers starting this week.

It is the third time advisers will face such questions, as the regulator is looking to understand the change in firms’ financial positions over time.

Support service provider Threesixty has been notified about the upcoming survey and subsequently informed its firms in an email yesterday.

The survey will consist of 10 questions. It will seek information in the following areas: liquidity/cash availability and needs; recent financial performance; scale of business activity; access to government schemes.

The FCA launched the first phase of its Covid-19 impact survey in June 2020, covering around 13,000 firms, and then rolled this out to a further 9,500 firms at the beginning of August.

The survey was then repeated, and this is the third time firms will be asked to fill in the data.

FCA: ‘Significant number’ of firms could fail this year

According to Threesixty, the FCA is planning to send the survey to all those firms that were sent it in June last year between 13 January and 19 January 2021. This group of firms will include advisers, wealth management firms, and other intermediaries unless they satisfy specific exclusion criteria.

“We understand that you may feel frustrated about having to submit data for a further time but unfortunately completion of the survey is mandatory,” Threesixty wrote.

The FCA evaluated data from the first two rounds of the survey at the end of October, and identified up to 4,000 firms having low levels of financial resilience and being at a heightened risk of failure following Covid-19 shocks.

The findings suggested that 1,200 of these firms had “the potential to cause a higher degree of harm”, and over 800 of those “potentially had Financial Services Compensation Scheme coverage”.

However, commenting on these findings in December, FCA chief executive Nikhil Rathi noted that the numbers have likely changed since the end October, as market conditions have evolved.

He noted that “many [of these firms] will be able to bolster their resilience as economic conditions improve.”

Rathi said: “The economic situation is rapidly evolving and therefore these numbers are dynamic.

“Announcements such as the potential development of a Covid-19 vaccine and extension of government support package bring about sharp movements in the market and reduce the risk of firm failure.”

Threesixty wrote yesterday that prior to receiving the survey, firms should receive “a warm up/introduction email from the FCA.”