The UK Financial Conduct Authority watchdog is intending to investigate the use of in-house funds by wealth management firms and private banks.
A statement from the FCA said: "We will assess how wealth managers and private banks effectively identify and manage the conflicts of interest that arise when client assets are invested in in-house funds and investment products."
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The FCA is inspecting this due to both their feeling of the wealth management sector as important and partly because recent thematic reviews have highlighted significant use of in-house funds and investment products in private client portfolios.
The FCA will take specific action if instances occur where firms are not complying with their existing terms, or the FCA’s expectations. The intention of this investigation is to better their understanding of the commercial drivers, potential benefits to clients, and the potential for conflicts of interests between firms and its’ clients.
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