The recent ‘Dear CEO’ letter delivers a direct and unambiguous message; in the view of the FCA many wealth managers are NOT putting customer’s interests and outcomes first.
So what exactly does the recent letter say? There are three key points:
1. Segmentation and alignment of products and services
2. Fair Price & Value
Additionally, the letter shines a spotlight on financial crime and stresses the connection to existing and would-be customers, highlighting the ‘damaging impacts’ of financial crime on consumers, as well as markets and wider society not to mention causing harm to the ‘reputation and long-term profitability of the industry’.
3. Preventing Financial Crime
What Actions Should Firms Take?
For recipients for whom this month’s letter may have set alarm bells ringing, particularly after forewarning of ‘short notice’ or ‘unannounced’ visits, fortunately clear guidance is provided on how to avoid falling foul of the FCA’s ‘formal intervention powers’.
See more on this point in our recent blog.
How Wealth Dynamix can help
Our reading of the recent letter provided was something of a strange case of déjà vu. The emphasis on customer interests and outcomes has parallels to another ‘Dear CEO’ letter issued 14th of June 2011, in that instance on MiFID suitability – a topic that strongly overlaps with the recent Consumer Duty regulation.
That event – some 12 years ago now – holds particular significance to Wealth Dynamix because it was exactly that event that drove home to our founders just how underserved the wealth management sector was in terms of technology solutions that would build regulatory compliance into the bedrock of a business.
Since early 2012, Wealth Dynamix have been delivering solutions that provide wealth management firms with rapidly deployed solutions to regulatory challenges; solutions that truly deliver ‘compliance by design’.
Key Solution Capabilities
And much more. See our recent thought leadership piece here.
And much more. Click here to find out more.
And much more. See our guide to suitability here.
Get in touch to find out more
If your firm is struggling to meet the regulatory challenges set forth in the FCA’s recent letter, or you are struggling with another regulatory issue, Wealth Dynamix can help. It’s key to note that the FCA expects to send a further survey in 2023, and more broadly for its supervision to become “more targeted, intrusive and assertive”.
If you are one of these firms, the first words of the Dear CEO letter are perhaps the most important; ACTION REQUIRED.
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