Can the FCA get rid of Gabriel’s gremlins?

By Hope William-Smith

Go to the profile of Money Marketing
Feb 05, 2019

Can the much-criticised reporting system turn a corner in gathering useful data or is it simply destined to be the subject of complaints?

Incessant complaints from advisers about the complexity and tedium of the Gabriel reporting system continue to throw a key concern into the spotlight – is the FCA’s data collection actually achieving anything?

The regulatory reporting system, which stands for “gathering better regulatory information electronically” has long faced criticism for its alleged failure to yield useful information or insights to help stop problems in the advice profession.

Beyond its well-publicised tech troubles, advisers are concerned that their views on the Gabriel system are still not being considered.

Last year, the Complaints Commissioner quashed multiple complaint cases about Gabriel brought by advice firms.

Many centered on fees handed down for missing reporting deadlines and incorrect submissions advisers blame on incompetent back-end technology.

The FCA did not respond to questions about the number of late filing fees and complaints it had received that specifically related to Gabriel in the past year.

Money Marketing has placed a Freedom of Information Act request with the FCA to try to acquire more information on the regulator’s return collection.

With many unimpressed at the issues continuing to plague the system, Money Marketing takes a look at what improvements advisers can expect from the technology to justify their fees.

A system under pressure

The FCA also did not provide an answer when Money Marketing asked how many times the Gabriel system has been offline in the past 12 months.

Advisers say access to the site is often restricted and regularly bottlenecked in the weeks before returns are due.

The system buckled under the pressure shortly after launch in 2008, with predecessor regulator the FSA having to extend the reporting deadline for 3,000 firms.

The FCA blamed a major 2016 outage on a similar “physical hardware incident”.

The Complaints Commissioner urged the FCA to review its technology along with its internal systems last year.

In one case in September, Complaints Commissioner Antony Townsend said a complainant ordered to pay the £250 late submission fee received an “inappropriately worded” email.

Without prior warning, the email referred to a forceable collection of the fee through debt collectors.

Townsend said: “There was a gap in communication around this, and I suggest the FCA considers whether it needs to review systems to ensure that messages are clearly flagged.”

Money Honey Financial Planning managing director Jane Hodges filed her most recent Gabriel return on Monday, and had told Money Marketing beforehand she expected a frustrating process.

“I’ve had times where I had to try four times to get online. The problem is, you would think advisers would do this before the last couple of days, but if you’re doing a return due end of January, it’s all about your firms’ figures until the end of March.

“If you could gather everything earlier, there wouldn’t be a problem, but everyone seems to do it at the last minute, so sometimes you can’t access the system or you will be kicked off it and have to start over again.”

The tight turnarounds can be especially tricky for small firms which need to enlist the help of accountants.

Meldon & Co director Mark Meldon says there needs to be more support for the parts of the report that cannot be filed until the last minute.

The 10-part reporting in the Retail Mediation Activities Return requires advisers to detail profit and loss data, core businesses lines and training and competence records for staff.

Input also includes specific breakdowns on qualifications, continuing professional development, professional indemnity insurance costs and coverage, which requires more man hours each year for some advisers.

Meldon says: “Along with your insurance, it really is one of the darker spots of the year and it gets ever more tiring as the years roll on. There’s always more columns to fill in and more figures and increasingly complex information they want out of everyone. The worst bit is there appears to be no point to it all and the systems remain clunky.”

Hodges says smaller firms are also disadvantaged.

She adds: “Bigger firms have the technology to pull all the information together quickly for you and check it and have it ready, but smaller firms need to reconcile different parts of the equation at the back end and double check everything, and the turnaround time is very tight so that what you actually have in the report is as up-to-date as possible.”

Expert view

The FCA dictates rules on returns

Thank goodness, I don’t have to complete Gabriel returns. In many ways they are rather like tax returns. I have to submit paperwork for personal tax, corporation tax, PAYE and VAT. Recently, HM Revenue and Customs has issued fewer reminders, replaced by very aggressive letters. One letter received on corporation tax made threats if payment was late, but did not contain a payment slip. This had been sent in April, 10 months earlier than it was received.

Like HMRC, the FCA dictates the rules. There have been issues around Gabriel reporting for many years now. Like HMRC, it appears to be issuing fewer reminders to the advisers. At the same time, it has been accepted across the profession that the systems are not perfect.

The regulator should always make life as easy as possible for the adviser. The more time spent on regulatory systems and processes, the less time is available to ensure good, compliant advice.

It is in the FCA’s interest to be helpful to good advisers and to terrify bad ones. I am not sure it has the balance right on this.

Clive Waller is managing director at CWC Research

Another bonus for networks?
A Quilter spokeswoman says advisers in the Quilter-owned Intrinsic network have reporting done centrally to help the process along.

She says: “One of the benefits of being in a network is that, as the regulated entity, it completes the required returns rather than the individual appointed representatives.”

Like in many areas of communication with the FCA, networks may also have the upper hand on small firms when it comes to fixing any reporting problems that arise.

The Quilter spokeswoman says: “From time to time we do experience some technology issues with returns and at those times, we engage directly with the FCA and we have found it to be helpful in resolving things.”

However, smaller companies do have the advantage of personalised systems, Jacksons Wealth Management managing director Pete Matthew says.

“The thought of doing a network or national return makes me shiver. We can hone our information systems to make the job as easy as possible. I wouldn’t like to imagine what is needed for networks.”

Adviser view


Justin Modray
Director, Candid Financial Advice

Gabriel is such a cumbersome and antiquated system. I appreciate collecting varying data from a wide range of firms is a complex task, but it does feel like a very user-unfriendly data entry system from 20 years ago. That said, if the alternative is upgrading the system and that means the FCA has to look at spending tens of millions of advisers’ money, making some management consultants rich in the process, I can live with the current system. Looking at the bigger picture around Gabriel, I still do wonder how closely the FCA actually looks at the data advice firms input.

Clarity on fees
Another two complaints brought to the Complaints Commissioner in October argued late fees had been unjustly applied to firms following more website glitches.

In line with the wider industry effort to increase transparency on costs and bring clarity to charges, Townsend suggested the FCA should be obliged to practice what it preached.

In those cases, the FCA took the Commissioner’s recommendation to retract its £250 standard late fee.

While the FCA also responded positively to the Commissioner’s calls to consider updating its system, no further progress has been announced.

The Lang Cat consulting director Mike Barrett says advisers might be making excuses over their returns though.

“I do wonder if advisers will just complain about things like having to do their Gabriel return just because it’s a pain to get it done rather than because there are problems with the system,” he says.

Candid Financial Advice director Justin Modray says that advisers understand there cannot always be leniency.

He says: “The FCA has fined many firms in the past over missing a return deadline and I don’t have any sympathy, unless perhaps Gabriel was unavailable around the deadline.”

Adviser view 

Tony-Byrne-2012Tony Byrne
Financial planning director, Wealth and Tax Management

There have been no improvements whatsoever with Gabriel over the years. Spreadsheets need to be filled in manually and there is too much jargon that even advisers do not use. The notes that go with how to fill in the form are longer than the actual form itself. My fees have also gone up probably around 400 per cent in the past seven years. There’s just no joined-up thinking from the FCA on how to approach things and no one seems to be thinking what would be in the best interests of the advisers. You think there would be a big enough budget to fix things.

Modray adds: “Since the FCA states the penalty for the late submission in its reminder emails, it’s hard sometimes to see how advisers can plead ignorance.”

The regulator’s reminder emails to advice firms ahead of return deadlines remain the primary form of communication.

Firms hold sole responsibility for ensuring their contact details remain up-to-date on the FCA’s database.

In another Complaints Commissioner decision at the start of last year, a complainant alleged they had been charged the £250 fee after missing the deadline because the regulator had failed to send out its reminder email.

The Complaints Commissioner quashed the complaint as while it was unclear whether the emails arrived, the FCA was able to show they had been sent.

Hodges says advisers should still be able to expect some tolerance.

She says: “If you get unlucky and miss the deadline because you can’t get on, you’d hope there would be some sympathy at the end of it on the regulator’s side.

“Thousands of advisers need access to one very complex system at the same time, and with an understanding of IT, anyone could tell you that the back-end system is old compared to the current standard of technology, and needs updating.

“If the FCA is going to continue with its current technology it needs to listen and have a bit of leniency with people who have at least tried.”

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John 7 months ago