FCA Dear CEO Letter – Wealth Management and Stockbroking Supervision Strategy

The FCA has written to Wealth Managers and Stockbrokers setting out the key risks that such firms pose to their customers or the markets in which they operate. The FCA set out four ways in which customers may be harmed in this sector:

  • By having reduced levels of savings and investments due to fraud, investment scams and inadequate client money or assets controls;
  • By losing confidence in the industry’s ability to deliver their financial objectives due to mismanagement of conflicts of interest and market abuse;
  • Through reduced levels of savings and investments due to order handling procedures and execution processes that do not deliver best outcomes; and
  • By being unable to understand the costs of services provided by firms, due to insufficient or inaccurate disclosure of costs and charges.

The FCA’s supervision strategy, which started in April 2019 and which is expected to cover a two year period, will focus on the following areas:

  • Fraud, investment scams and Market Abuse;
  • Best Execution;
  • Costs and Charges Disclosures;
  • The Senior Managers & Certification Regime; and
  • EU Withdrawal.

Other areas of interest for the FCA include an Investment Platform Market Study where the FCA has emphasised that improving the switching process remains a priority.

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