Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at

Suitability pressure could see 100 wealth managers 'shown the door'

by Elsa Buchanan on Jun 10, 2014 at 11:48

Suitability pressure could see 100 wealth managers 'shown the door'

Up to 100 wealth managers industry-wide could be shown the door over the next year as they struggle to get to grips with suitability and post-RDR professional requirements.

Increasing pressure from the Financial Conduct Authority (FCA) and hefty fines handed out on the back of the suitability review, which was introduced in 2010, have already driven some firms to release some ‘resistant’ senior staff.

But Vertem Asset Management co-founder Gary Stockdale believes the haemorrhage of staff has only just started.

‘Over the next year or so, a hundred will leave. They will either be shown the door, or leave through a more natural process, and join smaller firms, especially boutiques,’ he said.

His view is shared by Gilly Green, wealth management practice leader at Knadel, who said an increasing number of firms are asking her how to motivate people showing resistance.

‘It’s round two of the suitability review and there have been a lot more fines, so firms are taking it a lot more seriously. What firms are saying is “get with it or get out”,’ she said.

The chief executive of one wealth management company, who preferred to remain anonymous, described those in the industry who remain resistant to suitability measures as ‘the dying embers of the old style of private client management’.

The CEO said the removal of this ‘final wave of resistance’ would ultimately prove to be a positive. ‘It will be good for the industry and clients. We need a modern financial services sector. With the pension reforms and the opportunities they present to wealth managers, the industry has got to be as slick and modern as possible.

‘With the client’s best interests at heart, there is no room for resistant behaviour. The good news is there are a limited number of firms where you can go and be a lone agent.’

The CEO also believes this will be beneficial for younger investment managers coming through.

Sign in / register to view full article on one page

11 comments so far. Why not have your say?

Richard Wales

Jun 10, 2014 at 12:51

Why the resistance?

Knowledge is power.

Tomorrow is wednesday, and I can not stop that!

report this


Jun 10, 2014 at 14:20

This is such bigoted nonsense. I quote "the dying embers of the old style of private client management’. There are many with ample experience who believe that "old style" proved itself over '00s of years. Without "old style" there would have been no Cazenove, no Hoare Govett, no Scrimgeour, etc etc in fact no London Stock Exchange. "OLD STYLE" TOOK RESPONSIBILITY FOR THEIR ACTIONS, TOOK 100% UNLIMITED LIABILITY FOR THEIR PERSONAL AS WELL AS CLIENTS AND COLLEAGUES AFFAIRS. To suggest that the new RDR qualification process makes the City more professional is utterly contemptible. The only thing that RDR has done is put out to grass those with experience and common sense, and worst of all attempted to indoctrinate investors into a fee is best landscape.

report this


Jun 10, 2014 at 15:29

CDL is quite right. What the regulator is attempting to do is take away the skill of investment management and replace it with a mainstream process - documented, of course.

report this


Jun 10, 2014 at 16:07

Couldn't agree more with CDL; who is the writer of this pompous drivel? I have been a private client stockbroker (apparently we're now called investment managers) for well over 20 years and never had a complaint from any one of my clients. The bureaucratic monster that is the FCA has to be stopped before it wreaks permanent damage on the industry and we all become homogenous clones.

report this

Anonymous 1 needed this 'off the record'

Jun 10, 2014 at 16:54

It is terribly sad how bureaucracy has gone mad. Clients will be left in the position where they can only be discretionary and only invest in funds. I agree 100% with CDL. The old guard, on the whole, were honourable and ostracised the bad apples - "Dictum Meum Pactum" has become "Please read, and re-read, the small print, which you won't understand anyway".

report this


Jun 10, 2014 at 17:58

To be fair, CDL, yer man Gary did concede that they would leave and join smaller firms. From the sound of things, that would be to everyone's satisfaction, not least the poor benighted clients of the wannabe 'slick and modern' brigade.

'Slick and modern' isn't what our client base wants, or what we need. What is needed is some means of combining and then representing the views of those who espouse the unfashionable business model that Slick and Modern Gary deplores. Neither the WMA nor the IMA addresses or even recognises those views. But we're still right, and our clients are better served.

report this

Anthony Robson

Jun 11, 2014 at 11:41

For' lunatics taking over the asylum' read 'Robots taking over Investment management world'

Being able to sit lots of exams, and pass them of course, does not make you a better Stockbroker, just better at following orders and being happy to adopt a sheep like mentality.

Funding for, and Growth in small and start up companies;(what the stock market was actually set up for), is about entrepreneurial thinking and years of experience in these matters.

Are we all actually really missing the big picture? and somewhere there is a small group pulling all the financial worlds strings?

report this


Jun 11, 2014 at 14:24

I recommend that all PCIAM's obtain a copy of Donald Cobbett's book written in 1986 entitled "Before The BIG BANG" which can be bought on Amazon for £2. The final chapter is rather prophetic...."And What of the Future?"

The very last para. says and I quote;-

"For their own convenience (referring to Pro-Big Bang lobby made up of politicians, bankers & institutions) and the greater economy of their operations, not to say bolster their own selections, institutions and the broker-cum-banker conglomerates, want TOTAL COMMAND over packaged schemes of investment. USE OUR EXPERTISE they invite. TROUBLE-FREE investment...? Another version of BIG BROTHER!"

Powerful stuff!

report this

Anonymous 1 needed this 'off the record'

Jun 11, 2014 at 15:01

"The clocks were striking thirteen as Winston Smith hurried back to his desk in Room 101 of the all-powerful FCA."

report this


Jun 11, 2014 at 15:10

I wrote something similar for my SFA (or was it TSA?) Reg & Comp exam in 1987. As I recall it, the core essay question was about the Gower Report, and asked us to argue the case for statutory regulation versus the case for self-regulation.

I received a credit for my exam, having argued forcefully against statutory regulation. Cue hollow laughter.

report this


Jun 11, 2014 at 16:08

Yes, this all goes back to 1986 when Cecil Parkinson, too busy doing it to Sara Keays, didn't realise that he was, in fact, doing it to the City. The introduction of Big Bang destroyed My Word is my Bond by letting bankers invade the markets. That is when the rot set in.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home

As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Sponsored Video: Barings on investing in Frontier Markets

From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.

More about this:


On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet