FCA outlines assertive supervisory plans for wealth management firms
This alarming statistic comes a year on from when firms first built and scrutinised their Consumer Duty implementation plans. And now, regulated businesses are being reminded that the Consumer Duty is not a ‘once and done’ exercise as outlined in the recent speech from the FCA’s Director of Cross Cutting Policy and Strategy Nisha Arora.
As firms work on embedding the Duty, it’s an important time for businesses to make sure the changes they’ve identified in the planning phase are now well underway. Beyond that, it’s essential to consider – do the outlined changes go far enough to achieve good customer outcomes?
Nisha Arora described the Consumer Duty as the “golden thread” that will run through all conversations that firms have with the regulator. In the coming months, the FCA has been clear that they will now test how firms have implemented and embedded the Duty across their full business life cycle – promising swift and robust action against businesses that aren’t doing what is required.
The FCA’s supervisory and enforcement approach will be “proportionate to the harm, or risk of harm, to consumers… we will prioritise the most serious breaches and act swiftly and assertively”. And it’s likely be driven by MI collated from firms, so it’s important to get yours right.
In this undeniable time of transformation for firms and the regulator alike, it’s a vital period to take rapid action if there’s elements of your Duty stance that you’re not comfortable with. Appointing independent regulatory expertise to review your firm’s approach to embedding the new regulation can be a diligent step to take – and TCC’s subject matter experts are on hand to support you.
Our skilled team can review your implementation progress, either by specific areas of risk or from beginning to end. We’ll highlight any areas of potential harm in the customer journey and work with you to put the mitigating preventative or detective controls in place. We can also look at your approach to customer outcomes monitoring, ongoing fair value assessments or customer communications testing – all likely to be the first areas of focus for the regulator.
As the FCA has been clear to highlight, a firm’s annual Consumer Duty assessment will form part of the evidence that considers a firm’s level of compliance. Our experts can assist with your approach to the annual assessment or provide a post implementation audit. This will help leave no stone unturned in terms of your compliance strategy to deliver the best outcomes for your customers.
The important role of data is continually spotlighted by the regulator as a crucial tool to leverage when assessing, testing, understanding and evidencing the outcomes that your customers are receiving. Our subject matter experts can guide you in developing an effective monitoring strategy that gives you deep oversight of your entire business to drive actionable insights.
With the stakes so high, maintaining compliance to the Consumer Duty is a significant task for any firm. Get in touch today to learn how our team of industry experts are ready to help.