The regulators expect the industry to be demonstrating trustworthy behaviour in their day to day conduct towards clients.
Conduct Risk in Wealth Management can be defined as the potential for an investment firm to cause detriment to their clients or to the industry as a whole. Activities around anti-money laundering and sanctions checking, client suitability and portfolio risk monitoring, client operations and data security fall into this category of risk.
Robert Roome
Director of Product
The regulatory focus on conduct risk from the regulators is not just that certain risks exist, but that firms may not be necessarily geared up to defend clients or the reputation of the industry against these risks.
In a competitive and diversified market, customer profiles and product offerings will naturally vary between firms. Each organisation must address the specific risks associated with poor client outcomes from their actions and these risks will vary in scale and focus depending on their business model.
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