Consultant Zone

FCA clampdown – a firm warning!

The FCA recently published its 2022/2023 annual report.  Within the 200+ pages, there are many ‘golden nuggets’ of advice for existing authorised firms and individuals as well as those aspiring to such privileged positions.  The report contains data showing it is getting tougher where it sees or predicts consumer harm.  It notes that it cancelled the authorisation of 627 firms that failed to meet its minimum standards or stopped them from being eligible for authorisation.  That’s 12 firms a week and a 30% increase over 2021. 

As part of its commitment to act faster and tackle consumer harm more proactively, the FCA has recruited 3 additional enforcement teams, so it seems unlikely that there will be a reduction in its focus in future years, so firms have been warned!

In addition to the cancellation of permissions, the FCA commissioned 47 s166 skilled person reviews at nearly one a week (up from 36 last year) with a combined price tag for the reviews of just over £35m.  The cost of non-compliance is getting expensive even without the additional cost of regulatory fines and remediation.  Over 50% of these reviews were the result of failings in retail banking and payments, retail lending, retail investments and general insurance and protection sectors, the same sectors from which we recruit our staff and consultants.

The main topics covered in the reviews were predictable; conduct of business, risk management frameworks, financial crime, corporate governance, SMCR (including culture), adequacy of systems and controls and adequacy of advice.  These are all areas where we provide independent support for firms already.

With Consumer Duty implementation fast approaching, the regulatory spotlight on firms is only going to get stronger.  Now is the time to ensure your policies, procedures and governance match up to external regulatory scrutiny.  Can you confidently confirm to regulators that your colleagues comply with your requirements?

With our experienced team of industry professionals, we are happy to provide consultancy services in a wide range of business areas, undertake second- and third-line reviews and, when necessary, provide staff to fill short to medium term resource gaps.  If you would like to discuss how we can help, please get in touch.