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LONDON (Reuters) - British financial advisory firms are not consistent enough when assessing the quality of products and services they recommend to clients, the Financial Conduct Authority said on Friday.
While the 13 firms assessed in the regulator's thematic review on the topic had demonstrated some good practice when undertaking due diligence, greater consistency was needed and there was room for improvement, it said in a statement.
Three were told to make improvements in their research and due diligence process, while a fourth was told to conduct a review of its past business. The individual firms were not named.
The FCA's review is part of a global focus on the risks borne by retail investors and the quality of advice being given, particularly at a time of low returns in many traditional asset classes and as many investors struggle to save for retirement.
The issue is particularly acute in Britain after retirees were last year given more freedom on where to invest their pension pot.
"Research and due diligence is one of the three pillars of getting advice right, which is why we have returned to this issue," Linda Woodall, director of life insurance and financial advice at the FCA, said.
"There are still improvements firms need to make and we'd encourage all firms to look at our findings and ensure that they are challenging themselves to ensure they're delivering quality due diligence for their clients."
Firms which did well had a "good culture of challenge", where staff felt able to question the firm's approach, the FCA said, while firms where culture was weak had a tendency to accept the "status quo".
Editing by Keith Weir and Alexander Smith