Focus on suitability compliance: a message not only for wealth managers
The FSA's "Dear CEO" letter to chief executive officers of firms in the wealth management industry, published on 14 June, described widespread failings identified in a review of the suitability of client portfolios in 16 wealth management firms, and suggests that the same failings may be prevalent in firms outside its initial sample. The FSA has asked wealth management firms to review their files to consider whether they meet – and can demonstrate that they meet – the FSA's suitability requirements
Firms outside the wealth management sector should also be taking note: this week, a director with compliance oversight was fined and banned for failing to ensure that his firm collected and analysed adequate management information to enable the senior management to properly identify and monitor the compliance risks that the business was exposed to, and for deficiencies in the file review processes.
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