Financial advisers have called on the regulator for clarity over the need to incorporate environmental, social and governance advice into the suitability process.
Following news that the UK will not be bound post-Brexit to align itself to rules requiring advisers to make sustainability part and parcel of the suitability process, advisers have called for clarity over what their regulatory requirements on ESG and sustainability should be.
This is especially the case, as a last-minute change means the suitability rules under Mifid II are not automatically coming into play as had been expected.
Advisers such as Peter Chadborn, managing director of Plan Money, has spent "tens of hours" in preparing for incoming legislation that would require advisers to incorporate ESG - only for the regulatory goal-posts to shift at the last hour.
Mike Barrett, director at the Lang Cat consultancy, said "unclear regulation, together with Brexit uncertainty", makes it almost impossible for advisers to plan with any certainty.
Unless the UK Treasury creates rules of its own to make sustainability or ESG part of the advice process when it comes to assessing a client's investment suitability, advisers will have spent a lot of time already during 2020 to get ready for no regulatory reason.
Elsewhere in Financial Adviser this week, reporter Chloe Cheung spoke with advisers who have said GPs have caused unnecessary delays to getting clients the cover they need this year.
Over and above the expected delays caused by Covid-19, advisers such as Alan Lakey, founder of CI Expert, have found many GP offices have left all insurance documentation to the end of the month to read and sign, meaning delays of weeks for clients seeking cover.
He warned this could cause 'financial exposure' to clients - an especially worrying situation given the uncertainty of the UK economy at this point in time.
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simoney.kyriakou@ft.com
