Introduction
Skilled Persons Reviews are a supervisory tool employed by the FCA to assess specific areas of concern within regulated firms. These reviews span all FCA-regulated sectors and function as in-depth, fact-finding exercises. The FCA uses them to collect historical data to determine whether remedial action is needed.
Triggers for these reviews include whistleblowing, thematic reviews and the introduction of new regulatory standards.
In the 2024/25 financial year, the FCA commissioned 48 Skilled Persons Reviews under Section 166 (s166) of the Financial Services and Markets Act 2000 (FSMA). These reviews play a pivotal role in delivering the FCA’s supervisory agenda, offering independent insight into firms’ practices where risks are identified.
Quarterly Breakdown of Skilled Persons Reviews
Q1 (April – June 2024): 14 reviews were initiated, with a significant focus on the insurance sector (6 reviews) and consumer investments (4 reviews). Key areas of scrutiny included governance, accountability, strategy, culture, controls, risk management frameworks, conduct of business and financial crime.
Q2 (July – September 2024): Another 14 reviews were commissioned, highlighting concerns in consumer investments (6 reviews) and wholesale sell-side markets (4 reviews). Notably, there was an increased emphasis on financial crime (6 reviews) and controls and risk management frameworks (4 reviews).
Q3 (October – December 2024): 13 reviews were conducted, maintaining attention on consumer investments (6 reviews) and introducing scrutiny in payments and digital assets (2 reviews). The FCA focused on financial crime (5 reviews), conduct of business (3 reviews) and controls and risk management frameworks (3 reviews).
Q4 (January – March 2025): The number of reviews decreased to 7, predominantly targeting consumer investments (6 reviews). Areas examined included conduct of business (3 reviews), controls and risk management frameworks (2 reviews), governance, accountability, strategy, culture (1 review) and prudential adequacy for solo-regulated firms (1 review).
What Does This Mean for Firms?
Whilst this is all useful information, what really matters is that you as a firm are ready should the FCA come knocking.
Approximately 75% of all reviews focussed on one of three specific areas; financial crime, controls and risk management and conduct of business, with each area accounting for approximately 25% of the total. This shows the FCA’s focus subjects and areas of industry weakness and gives a clear indication of the areas of business that firms should assess.
Receiving a s166 notice is rarely the FCA’s first step. It usually comes after a longer process of supervisory engagement. Most firms will have already encountered the FCA multiple times before a s166 review is imposed. The process often begins with a Section 165 (s165) information request, which may appear routine or benign, such as part of a sector-wide review or a simple update to the FCA’s records. However, if the FCA is not fully satisfied with the information provided, they may begin to probe deeper into specific areas.
Why Preparation Is Critical
Avoiding escalation is in every firm’s best interest. A response to an FCA request should be:
- Strategic
- Transparent
- Thorough and accurate
Every submission is open to examination and may trigger further action. Inaccuracies, delays or perceived evasiveness can escalate supervisory engagement to enforcement.
To prepare, firms should ensure:
- Well-documented governance frameworks and risk systems, in accordance with SYSC 4 and SYSC 7;
- Clear accountability structures; and
- Alignment with the Consumer Duty principles, particularly fair outcomes and acting in good faith (PRIN 2A)
The FCA’s Supervisory Priorities
From the data across 2024/25, it’s clear the FCA continues to target:
- Consumer Investments: By far the most frequently reviewed area.
- Financial Crime and Risk Management: A consistent priority across sectors.
- Governance and Conduct: Firms are expected to maintain a culture of accountability and fair customer outcomes.
- Digital Assets and Payments: The FCA is adapting to emerging risks in fintech and crypto markets.
What Are the Risks of Non-Compliance?
A Skilled Persons Review can be resource-intensive and disruptive. Typical concerns include:
- Cost and resource pressure
- Reputational harm
- Operational disruption
- Potential for escalation to enforcement
Failing to adequately prepare or cooperate with a s166 review may also result in formal action under the FCA’s enforcement powers, especially where consumer harm or systemic risk is identified.
Conclusion
The 2024/25 Skilled Persons Review data underscore the FCA’s proactive approach to supervision. Firms should maintain vigilance, reinforce internal controls and stay aligned with regulatory expectations.
How Complyport Can Help
Directing the FCA’s regulatory landscape requires both preparedness and expert support. Complyport offers a suite of services designed to help firms stay compliant, mitigate risk and respond effectively to supervisory scrutiny, including Skilled Persons Reviews. Here’s how we can assist:
- Regulatory Health Check: A comprehensive review of your firm’s compliance framework to identify gaps and areas for improvement before the FCA does.
- s165/s166 Readiness Support: Guidance on how to handle FCA information requests and prepare for potential Skilled Persons Reviews, including response strategy and documentation checks.
- Governance and Risk Framework Design: Help build and enhance governance structures, risk management systems, and internal controls tailored to FCA expectations.
- Compliance Documentation and Policy Reviews: Ensure your policies and procedures are up to date, aligned with regulatory developments and defensible under scrutiny.
- Ongoing Compliance Support: Flexible retainer-based services providing ongoing access to experienced compliance professionals for day-to-day or strategic guidance.
Get in Touch
Book a consultation with one of our Subject Matter Experts today to ensure your organisation is well-positioned to stay ahead of the curve with proposed regulations.
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