Financial Advisors To Record Calls Under New FCA Rules

October 24th, 2016 9:24am | Call RecordingClarifyComplianceFCARecord

The FCA has announced plans to extend regulatory call recording to financial advisors.

The intention is to deter market abuse, protect consumers and strengthen industry integrity. It will also help to settle disputes between firms and their customers as there will be a clear picture of what was discussed and agreed.

The proposal, outlined in a consultation paper released in September, is an extension of the MiFID II directive that comes into play in January 2018. MiFID II states that firms must record phone conversations and electronic communications that relate to “the reception, transmission and execution of orders or dealing on own account”.

The FCA intends that all “Article 3” companies should be included within the new guidelines under UK law, including investment firms, financial advice firms and corporate finance boutiques.

The paper is further supported by data from the Financial Ombudsman Service, which shows customer complaints about investments often centre around exchanges at the point of sale.

Amendments

Under MiFID II, other parties previously exempt from the requirement to record will now have to comply, including discretionary investment managers, energy market activity and oil market activity. Smaller firms may however be considered for exemption.

Another change is an extension to the period of time that calls must be stored from 6 months to 5 years (7 years in some cases).

Cost Implications

The FCA are quick to point out that for many companies, there will be little or no cost implications under the new guidelines. Many are already recording calls when handling financial transactions or for training purposes, and the new proposals will simply be an extension of current call recording activity.

However, it is clear that financial advisors that come under ‘Article 3’ firms will have to invest in call recorders to store phone conversations, including those made using mobile phones.

Non-MiFID companies are to continue recording in line with any activities they undertake of a financial nature as outlined by the FCA. They may choose to record calls for training and monitoring purposes in any case.

Oak Delivers

Oak is in a strong position to provide financial advisors, and others within the finance sector, with a choice of call recording solutions:

RecordX has earnt its stripes as our best-selling, easy-to-use, call recorder that works on any switch. It offers easy search and playback, PCI compliance and good storage capabilities, as well as being a useful tool for conflict resolution, training and monitoring purposes.

Clarify is a new suite of call recording and quality measurement tools that goes even further. Inspired by industry feedback and the latest technology, it is a sophisticated, custom-built, Cloud-enabled solution designed to support a business’ unique goals. Clarify is ideal for the financial sector, offering features such as stereo recording, where each side of the conversation can be listened to on its own. It also includes screen recording, so a conversation can be traced across communications. Clarify also offers an advanced performance measurement module to monitor and support ongoing service improvements.

For more information on call recording solutions from Oak, simply call 0800 9889 625.