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Collins Stewart’s Darke calls for FSA risk management clarity
by Annabelle Williams on Nov 14, 2012 at 11:09
The Financial Services Authority (FSA) should better articulate how wealth managers can approach risk management, Collins Stewart’s chief executive officer Neil Darke has said.
Although Darke said he agrees risk management and a focus on suitability is essential for wealth management businesses, he feels the FSA could be doing more to provide the industry with clarity on its regulatory demands.
‘I don’t think they are doing a particularly good job of it. They are being equally vague.
'They say wealth managers should focus on [risk] but what’s your definition of risk? It's very much, “I’ll let you guys work on that one”. You just get a slightly different type of wool rather than anything clearer and explicit,’ he told Wealth Manager.
The firm is also grappling with how best to market its status as a restricted wealth manager following the introduction of the retail distribution review (RDR) in January 2013.
‘We can’t [be independent] because we have restricted services but there is the problem of how you communicate that to clients?’ he said, although he conceded that the labels ‘probably matter less than we think in the industry’.
Darke suggests many businesses are still being coy about their post-RDR strategy, preferring to keep quiet until it is clearer what competitors are doing. ‘We are no different,’ he acknowledged.
‘There’s no first-mover advantage in going above and beyond where you need to go, so you will find a lot of businesses tiptoeing over the line of 31 December and having a look at everyone else.’
Growing the business
One aspect of Collins Stewart’s post-RDR strategy that has been revealed is a bid to grow assets through IFAs with the launch of a range of risk-rated model portfolios.
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