FCA outlines assertive supervisory plans for wealth management firms
As firms prepare to demonstrate that the Consumer Duty has been effectively implemented within
As firms prepare to demonstrate that the Consumer Duty has been effectively implemented within their organisation, TCC is finding that a material number of firms are still facing obstacles:
These issues are particularly relevant (on a firm-wide and individual accountability basis) for those in leadership positions such as:
Consumer Duty and Governance: Getting ahead of the issues
The issues highlighted can often leave firms exposed to ongoing risk, some of which may be material to a firm’s own levels of risk appetite and tolerance. These can also be a sign that some regulatory risks have not been identified or defined clearly enough and are ultimately not being addressed appropriately.
For senior management, this can have the knock-on effect of making it difficult to challenge current processes and controls, resulting in individual and collective discomfort about the true effectiveness of the firm’s overall Consumer Duty strategy creating material risk.
In other words, when the fundamentals aren’t properly addressed, senior management can’t be sure if things have been done correctly – and to the appropriate standard and level of integrity – for them to discharge collective and individual responsibilities.
Firms should be mindful that both the FCA and external auditors alike have highlighted the dangers and consequences of falling into common pitfalls. They note these issues are often the most common cause of regulatory intervention against both firms and individuals. In our experience, many core issues ultimately stem from cultural factors, including:
To ensure these problems are addressed before you make any further progress on the Consumer Duty, TCC recommends all senior management – especially those highlighted above – to take this opportunity to reflect on their potential next steps.
Leaders should ask themselves if they’re truly comfortable with the information currently informing their Consumer Duty and associated decisions that discharge their responsibilities; or if some of the observations outlined above resonate with them.
If you’ve identified any of these risks or issues within your firm, get in touch today.
Our Regulatory Advisory Services team provide a ‘no obligation’ discussion on how we can work together and help you address your Consumer Duty challenges.