The FSA is to take further action over wealth management firms more than a year after it warned of ‘significant, widespread failings’ in a sample number and expressed fears that such failings were prevalent across the industry.
In June last year, the FSA wrote a ‘Dear CEO’ letter to the bosses of wealth management firms, expressing its concerns.
It has now announced that it is continuing to interact with firms to mitigate the risks identified, which were mainly around record-keeping and the suitability of advice.
FSA action has led to enforcement referrals, skilled person’s reports and significant remediation programmes. In addition the FSA has delivered a series of seminars to compliance officers and consultants, aimed at raising awareness of the standards expected.
The FSA will now be interviewing key individuals from firms that formed part of the previous work to understand the approach their firms have taken to put problems right, and in particular whether they have been sufficiently rigorous in identifying and dealing with past detriment that consumers may have suffered.
Following these interviews the FSA will consider whether to take further regulatory action.
In a statement, the FSA said: “We have now commenced a new phase of thematic work and will, again, be making judgements on the suitability of client outcomes, but also complementing this approach with a direct assessment of firms’ systems and controls.
“We will be acutely interested in whether firms have heeded the warnings and concerns contained within our previous communications. We will provide further updates on this work in 2013.”
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