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Redress has become an increasingly important consideration for financial service firms looking
23/02/26
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Why financial service firms shouldn’t treat redress as a footnote
Redress has become an increasingly important consideration for financial service firms looking to maintain strong governance and manage long-term risk.
Whether dealing with historic advice, legacy products or incomplete records, identifying and addressing potential liabilities is a key part of ensuring resilience and making well-informed commercial decisions.
Yet redress is often treated as a technical exercise to be resolved later. But this approach can underestimate the broader strategic issues that influence valuations, operational planning and regulatory confidence. It’s critical to ensure that a firm’s exposure and any future pressures are adequately understood so that any identified redress is defensible and proportionate.
To support this, we’ve compiled ‘The complete guide to redress support solutions’, which covers the core principles, methodologies and practical considerations firms need when assessing and managing redress obligations.
Understanding the scale of legacy risk
One recurring challenge when reviewing historical portfolios and advice is that the available data rarely provides a complete picture. Systems change, documentation standards evolve and regulatory expectations shift over time. Reconstructing what went before is often not straightforward and without a structured approach, firms may struggle to determine the full extent of potential liabilities.
Redress involves more than reviewing transactions. It requires examining customer journeys, assessing the suitability of past advice and identifying where gaps in historical records might create exposure. Representative sampling and modelling can provide a clearer view of risk, enabling firms to develop a robust, evidence-based understanding before making decisions with financial or operational implications.
Turning insight into action
Once any potential issues have been identified, it’s essential to manage them in a way that balances accuracy, efficiency and governance. Effective redress processes help ensure a consistent application of principles, transparency and scalability to meet a firm’s operational requirements. At the same time, calculations need to be defensible and auditable to provide confidence to the board, stakeholders and the regulator.
Taking such a proactive approach and applying a disciplined methodology enables firms to align redress considerations with their commercial and strategic priorities. Clear insight into legacy exposure helps inform decision-making, anticipate potential costs and ensure that operational and capital plans reflect the full scope of risk.
The value of structured redress
Managing redress is not just a compliance task. When approached with rigour and structure, it becomes a source of insight and assurance, helping firms navigate legacy portfolios and maintain stakeholder trust. Treating redress as an integral part of governance and decision-making will help firms turn uncertainty into clarity.
Download ‘The complete guide to redress support solutions’ now to read our practical insights to help firms assess, manage and remediate redress effectively.
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