Is Your Compliance Team Failing To Prepare Senior Management For The Future?

The Financial Conduct Authority will put firms senior managers “through their paces” with the introduction of the Senior Manager’s Regime in 2018, …

… and regulatory professionals need to ensure that the board takes its compliance responsibilities seriously“, the owner of “Compliance Consultant“, Lee Werrell has warned.

“Although the industry had yet to see the regulator take a senior management “scalp”, the FCA will, as now, expect Directors, Chief Executives, Some Non-Executive Directors and their boards along with other Senior Management to be fully conversant with day-to-day compliance and risk issues. Boards must be well informed through relevant and pertinent MI”, he added.

The FSA’s Enforcement Guide 8.2 states ‘The FCA will proceed on the basis that a firm (together with its directors and senior management) is primarily responsible for ensuring the firm conducts its business in compliance with the Act [FSMA], the [FCA] Principles and other rules.’

Despite the fact that it would not be reasonable to expect the chief executive of a large company to deal with this level of detail on a daily basis, whenever any issue of compliance or risk arises, the regulator would typically ….

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FCA tells firms to revisit past advice after suitability review

FCA tells firms to revisit past advice after suitability review

The Financial Conduct Authority (FCA) has said firms should revisit advice given in the past after it found unacceptable examples of suitability reports as part of a review which involved 700 firms.

In April 2016 the FCA started the review when it asked firms for suitability reports from the previous year.

The regulator has recently begun to send out letters to firms which took part in the review, detailing what it found out about individual firms.

As well as looking at suitability requirements for a particular client, the regulator has commented on whether reports have met disclosure rules and looked for ‘indications of weaknesses’ in the advice process.

Firms which did not meet the regulator’s standards have been told to rethink advice given in the past.

‘Where we have identified issues with your advice process, please consider how these may have affected any clients and what actions need to be taken to improve these processes going forward,’ the letter, seen by New Model Adviser®, said.

‘Where applicable, you should look to revisit any advice that may need reconsideration and possible further action by your firm.’

In the letter, the FCA tells firms whether the suitability report showed the advice was suitable, unsuitable or unclear. It also tells firms if the level of disclosure is acceptable, unclear or unacceptable.

Problems with advice processes are also identified, where the regulator looked to identify problems which may affect other clients not included in the review.

The FCA said that where problems have been identified with a suitability report, advice firms should tell the clients about any missing information.

‘Please revisit the client file and consider how the client can be informed of the necessary information that has been omitted. In addition, consider how the omission of relevant information disclosure might have adversely impacted other clients and consider whether this omission reveals an area in your wider advice process which might be improved,’ it said.

Advice firms have two weeks to contest any inaccuracies in the FCA’s response.

Public findings?

The FCA has so far stopped short of publishing wider findings from the review of suitability reports.

However, under the ‘next steps’ heading in the letter the regulator said it was considering how to publish general findings from the reports to investment advisers.

‘The findings in this letter are specific to your firm and do not constitute general findings from our review. We will not name firms when communicating any general findings,’ it said.

Compliance Consultant can provide past business review services for any size of IFA or Wealth Manager. Please contact our London office on

0203 815 7939 or 0207 097 1434

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Source: http://citywire.co.uk/new-model-adviser/news/fca-tells-firms-to-revisit-past-advice-after-suitability-review/a990637

IFA Access Compliance advice on Facebook

Message from the Owner: Hello, my name is Lee Werrell, Chartered Fellow of the Chartered Institute of Securities and Investments and a Fellow of the Institute of Sales & Marketing Management. I have also written the “Compliance Managers Guidebook and Reference) found on Amazon and the book “Conduct Risk”. 

Anyway, you may or may not have heard of me but, either way, I think it’s important to know I’ve just created a brand new “No cost” service to IFAs and Wealth Managers, and the group is already filling up with information and guidance.

And the title of our brand new service is a Facebook Group called “IFA Compliance UK”.

Do you use social media? Do you get great results?

If you search groups for IFAs of Financial Advisers on Facebook here in the UK, the results are pretty poor, in fact it is pathetic, as IFAs are not really using social media effectively, let alone email marketing (two areas that we shine in).

The group is free to join up until the end of April, but after that will revert to subscription membership.

This new service is so revolutionary and new providing you with a peer advice as well as regulatory opinion from Compliance Consultant (a leading UK consultancy), information that you won’t find anywhere else, at the touch of a mouse.

It doesn’t matter if you are a DA or a network firm or even if you conduct your own compliance in-house, sometimes you need a third party to back up or even challenge your own answers. That’s where the group adds value and becomes powerful.

There are 5 great reasons to become a member of our group now.

  1. This service is completely without charge for the first three months. That’s right, open to IFAs of any size and locations that are regulated by the FCA.
  2. Once you are a member, there is no charge, at all, ever (unless you leave and rejoin).
  3. You get qualified and experienced advice from compliance professionals and not just hearsay or a company trainer’s opinion from IFA networking events.
  4. We also have access to hundreds of contractors and specialists (PTS, Complaints etc) if you need them.
  5. We are a leading compliance consultancy in the UK, and
  6. A member of the Association of Compliance Consultants (APCC) the only trade body recognised by and working closely with the regulator.

Join now at https://www.facebook.com/groups/IFAComplianceUK/ or search “IFA Compliance UK” in Facebook and we look forward to seeing you soon.