The enforcement Final Notice relating to this case shows clearly that the Financial Services Authority (FSA) does not just pursue non-compliant advice and sales. The regulator also expects senior management in every authorised firm to take responsibility for the systems and controls that are necessary to protect its customers. The firm in question had failed to allocate senior management responsibilities to the extent that there were no systems in place to assess the competence of advisers or to evaluate and record any training. In addition, its Financial Promotions were not signed off and its complaint handling procedures were inadequate.
There are clearly still firms trading in the IFA sector that have little understanding of what is needed in terms of senior management systems and controls, and yet this sector has been regulated for 18 years. There must be many more firms in the recently regulated MGI market that also lack proper systems and controls and this needs to be urgently addressed.
All of the failings cited at this IFA firm were about general management and control issues that transcend product categories such as mortgages, GI and investments. Manual systems and controls may seem a cheap and easy option, but may prove to be very expensive if they don’t work properly. Only an integrated IT solution can provide a copper-bottomed guarantee that all aspects of what the FSA expects are being properly controlled and monitored, at the same time providing management information and full records as proof of the firm’s proper attention to systems and controls.
Richard Angliss
Managing director
Home Buyer Systems
