Welcome to my world 

IMG0146As I write this blogpost, my desk is covered with supporting documentation, accounting data and system reports used to compile the six-monthly RMAR using the FCA's Gabriel system.  

The picture shows some of the tools of the trade, including the essential cup of very strong, black coffee.  The Gabriel system requires, at this time of the year, 45 pages of data, comprising the following modules:

  • Complaints Return
  • RIA Complaints by Retail Investment Adviser
  • RMA-A - Balance Sheet
  • RMA-B - Profit & Loss Account
  • Section C - Client Money & Assets
  • Section D1 - Regulatory Capital
  • Section D2 - Financial Resources
  • Section E - PII Self-Certification
  • Section F - Threshold Conditions
  • RMA-G - Training & Competence
  • Section H - COBS Data
  • Section I - Supplementary Product Sales Data
  • CCR002 - Consumer Credit Data: Volumes
  • RMA-J - Fee Calculation Data
  • RMA-K - Adviser Charges
In compiling this data, we are heavily-dependent upon our Members using Clarity correctly (especially when it comes to categorising business, and reconciling incoming commission & adviser-charge payments).  Even so, it takes two members of staff (one a Chartered Accountant) nearly a whole week to get the job done accurately.  You may translate this through into time costs - we go through this process every May and November, for the six-month periods ending March and September.

A few thoughts come to mind as I supervise this process:
  1. ValidPath do this so that our Members do not have to.  Regardless of the 'value' I attach to the actual reporting, there is an immense value in protecting others from this kind of purgatory;
  2. Do the FCA 'care' about the data they receive from us?  There is little evidence that they do, based upon advice received historically from the Firm Contact Centre, encouraging us to fudge the return, so that it would actually self-validate.  On the other hand, if we do make a mistake, some algorithm, buried deep within an FCA computer generally spots it;
  3. Irrespective of the value to the Regulator, our sense is that, if reporting needs to be done, then it should be done well - which has profound ramifications for the way in which we handle the process, and the veracity of the data that our Members log onto Clarity;
  4. Operating within a regulated environment is now a fiendishly expensive proposition, as identified by the direct costs.  However, the indirect costs of complying with this system are simply monumental;
  5. Gabriel, as a system, seems designed to keep us on our toes.  Every time we think we've cracked it, when our processes and reporting have been improved to satisfy the FCA's insatiable appetite for data, they change it.  All that effort and expense in augmenting our reporting systems is relegated, yet again, to the scrapheap of good developmental intentions;
  6. Sometimes, I hear advisers complain about the pressures of their world, of the compliance hoops they have to jump through in order to deliver advice.    It would perhaps be unfair to compare those pressures with those associated with this level of regulation, but at least in relation to the advisory role, there is the immense satisfaction of delivering an improved client outcome, not to mention the associated remuneration.  There are no such satisfactions associated with the RMAR, other than the welcome relief when one ceases beating one's head against the proverbial wall.
So, please spare a thought for the ValidPath Team, if we seem a little out of sorts.  It's that time of the year, again.
Kevin Moss, 10/05/2016