The FCA has published its thematic review into the quality of debt management advice (TR15/8) which found the standard of advice provided by fee-charging debt management firms was of an unacceptably low standard and reaffirmed its view that poor debt management firms pose a high risk to consumers.
In conducting the review, the FCA selected a sample of eight firms, both fee-charging and free-to-customer, of varying sizes and business models, to assess the quality of advice provided to consumers.
The FCA labelled the findings ‘very disappointing’, observing that firms had fallen short of the standards expected, particularly when working with vulnerable customers. Although the advice provided by free-to-customer debt management firms was generally of a higher standard, the review found there was still scope for material improvement.
The FCA are now undertaking a broader assessment of firms on an individual basis as to whether each firm meets the standards for authorisation.
The thematic review can be read in full here.