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FCA's Dear CEO Letter to Wealth Management and Stockbroking Firms

08 November 2023
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FCA's Dear CEO Letter to Wealth Management and Stockbroking Firms

The Financial Conduct Authority (FCA) has published a ‘Dear CEO’ letter to wealth management and stockbroking firms.

Firms should read the letter to learn more about the FCA’s approach and expectations and integrate these into their own processes.

The letter highlights two areas of concern, prevention of financial crime and implementation of the Consumer Duty, and set outs the following principles:

  • Staying vigilant against knowingly or unintentionally engaging in fraudulent activities, scams, or money laundering.
  • Understanding your financial crime risks by thoroughly assessing your clients, their transaction patterns, and corporate structure.
  • Avoiding superficial, checkbox-style compliance measures or outsourcing responsibilities to third parties.
  • Establishing strong and effective systems and controls to combat financial crime and money laundering, tailored to your risk profile.
  • Ensuring individuals holding the SMF 16/17 positions possess the necessary expertise, skills, and independence.
  • Acting promptly by sharing and reporting any information about misconduct with the FCA and relevant law enforcement agencies.
  • Embracing the FCA’s Financial Crime Guide (FCG) and Financial Crime Thematic Reviews (FCTR), which provide a roadmap for firms to protect themselves against financial crime.
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