FSA reveals extent of firms’ failings in platform review
The FSA has revealed that every firm it visited as part of its platform thematic review did not have the appropriate systems and controls in place.
Speaking at the launch of Aifa’s platform due diligence guide in London today in association with Standard Life, Rory Percival, from the FSA’s conduct risk division, said the issue of systems and controls was one of the biggest concerns to emerge from the regulator’s thematic review in March.
As part of the review the FSA carried out a desk-based analysis of 33 firms advising clients to invest through platforms, with 12 chosen for detailed assessments.
Percival said that out of the 12 firms visited, every firm had insufficient systems and controls in place to some extent.
He said: “Where a firm has decided to change its business model, firms clearly need to look at how their business is developing, what different risks and concerns could arise from that, and ensure that their oversight arrangements and control arrangements are up to date.
“This is a particularly concerning area because when we did our thematic review earlier this year of the firms that we visited, to a greater or lesser extent, this was a failing with every single firm.
“I don’t think it’s an area that’s necessarily been discussed or considered sufficiently within the industry to date.”
Percival confirmed that Moneywise IFA, which has been fined £19,600 for platform advice compliance failings, was referred to the FSA’s enforcement division following the thematic review.
Moneywise was the only firm to be referred to enforcement, although two other firms were also required to carry out a past business review.