Changes to the financial reporting form advisers use to submit annual returns to the FCA could halve the costs of providing adviser charging data across the industry, the regulator said today.

The FCA has confirmed this morning it will make alterations to the Retail Mediation Activities Return, which will take effect from 31 December.
Its analysis of the costs and benefits of changes to Section K of the RMAR concluded that, as it was not seeking to change the data it collects from firms or obtain new data, the proposals should not result in any new one-off or annual reporting costs for firms.
In fact, it said with other changes to the data collection designed to reduce firms' reporting obligation, it estimated that the industry's £2.6m annual reporting cost could be halved.
The FCA said that all 5,000 firms required to complete Section K of the RMAR would benefit if it moved to annual reporting.
Today, the regulator said respondents to its consultation agreed that the proposals would reduce the costs firms incurred in reporting adviser charging data.
In particular, the move from six-monthly to annual reporting and allowing firms to report on either a cash or accruals basis were cited as leading to a reduction in staff time and accounting fees.
One respondent felt the proposals would not halve the costs its firm incurred in reporting adviser charging data, although they agreed the proposals would reduce the costs associated with completing Section K of the RMAR.
The FCA stated in its amended RMAR document today: "We recognise that the proposals may not halve the costs every firm incurs to complete Section K of the RMAR, although we estimate that the costs associated with providing adviser charging data across the industry could reduce by 50%.
"Based on the responses we have received, we are confident that most firms will see some reduction in their adviser charging reporting costs, which may further reduce now we are removing the need for firms to separately report
whether adviser charges were facilitated by a product provider or a platform service provider."

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The FCA confirmed it would go ahead with the four key changes it first outlined in March. These were:

1. Incorporate the contents of the interim technical note into Handbook guidance
- An interim technical note was published in November 2013, intended as an immediate first step to help investment advice firms report adviser charging data to the FCA by guiding firms through completing Section K of the RMAR.
The FCA report said: "The informal feedback we have received suggests that firms have found the interim technical note helpful when completing Section K of the RMAR."

2. Clarify the field labels used on the Section K data collection form and streamline the form to make it easier for firms to complete.
- The FCA report said: "The feedback we have received from firms has highlighted that the labelling of the fields on the data collection form are, in some places, unclear. Firms indicated that the design of the data collection form makes it difficult and unnecessarily time consuming to complete."

3. Reduce the reporting obligation for investment advice firms by only requiring adviser charging data to be reported annually
- Current rules require investment advice firms to complete Section K of the RMAR on a six-monthly basis.
The FCA report said: "Collecting this data every six months is useful to both our supervisory work and to monitor the market more generally.
"However, we recognise that this places a significant half-yearly reporting obligation on investment advice firms."

4. Allow firms to complete Section K of the RMAR on a cash or accruals accounting basis