Rathbones’ merger with Investec Wealth & Investment UK put pressure on the group’s ability to put in place new customer protection standards, reported Financial Times.
Sources told the publication that the group had not given enough focus to the consumer rules introduced in July 2023 because staff and management time were absorbed by the £839m merger completed that year.
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The sources said the work needed to combine the two businesses, including aligning technology and office operations, used resources that might otherwise have gone towards meeting the UK’s Consumer Duty requirements.
Recently, the company said it would suspend for as long as 12 months the onboarding of clients who need additional checks.
It would stop money being placed into general investment accounts for some of those clients while it strengthens internal procedures.
A person close to the process said Rathbones would begin writing to affected clients as it introduced a new internal structure for judging client risk and deciding whether enhanced due diligence was needed.
That person said there had been no single trigger for the action and no finding of deliberate wrongdoing.
Instead, the FCA responded to issues identified through its ongoing supervision of the group, the person said. The weaknesses related to investment culture, consumer trust, poor client outcomes and measures against financial crime.
