Context
The FCA has published a Dear CEO letter setting out its expectations for wealth management and stockbroking firms. As with any Dear CEO letter, it provides an insight into the FCA’s current thinking in relation to a number of topics, which can be applied across other financial sectors.
Key points to note
- In line with similar letters issued to other sectors, the letter references the Consumer Duty (particularly products and services, customer understanding, and price and value).
- Within an infographic at the end of the letter there are indications of the FCA’s wider focus, under a number of sections:
- low value services are referenced under a heading ‘Harms’;
- leadership, governance, systems and controls, and conflicts of interest are all referenced under ‘Root Causes’.
- In relation to the FCA’s expectations for fighting financial crime:
- enhance KYC;
- train staff to identify & report;
- improve systems & controls;
- recruit experienced & independent SMF 16/17s.
- In relation to the FCA’s expectations for the Consumer Duty:
- align products and services to customer needs;
- assess vulnerability;
- ensure customer understanding;
- regularly assess charges, and change when poor value is identified.
- Other priorities include operational resilience, CASS, ESG, DE&I, and non-financial misconduct.
Next Actions
None – for information and awareness.