The chairman of the UK’s Financial Conduct Authority said suitability remains as an issue firmly on the regulator’s radar in the wealth management sector and there is room for improvement in the selection of client investments by wealth managers.
John Griffith-Jones, the Financial Conduct Authority’s chairman Griffith-Jones (pictured) has highlighted three key areas that the regulator was planning to focus its attentions on in the wealth management sector: the impact of the retail distribution review (RDR); suitability and anti-money laundering controls.
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FCA chair has also called on wealth managers to help to come up with solutions for the growing post-RDR advice gap.
Griffith-Jones said the suitability of advice from advisers can be improved by improving documentation.
Griffith-Jones said: "We expect the sector to arrange portfolios which meet the needs and circumstances of its clients, and key to proving this to clients and the regulator is documentation, not for its own sake, but as a tool to safeguard the treatment of customer suitably, and indeed yourselves, should things go wrong.
"The thematic work we have done suggests there is still room for some improvement in arranging portfolios that meet the needs of clients. Documents supporting investment decisions should also be available.
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By GlobalDataHe added that wealth managers’ advice and the execution of client-investment decisions would be watched closely by the FCA.
