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Wheatley warns unsuitable wealth managers on client failings
by Alex Steger on Mar 13, 2013 at 10:24
Martin Wheatley, the future head of the Financial Conduct Authority (FCA), has sent out a warning to wealth managers which he said were not all living up to clients’ expectations and ignored suitability.
Wheatley, FCA chief executive designate, said wealth managers would not escape the FCA’s more intrusive regulation, adding the regulator would have a dedicated wealth management department within its supervisory are when it comes into force in April.
Wheatley (pictured) said the regulator had found that some wealth managers had failed to put client suitability at the heart of their practices and did not provide a great service.
'One of the major concerns I have, one of the concerns the FSA has, is that there are wealth managers in the industry who can’t hold their hands up and genuinely claim to be providing a great service to their customers,’ he said
‘I’ve heard of clients being urged to transfer self-invested pensions into discretionary investment portfolios so they can, apparently, manage their risk better. Only for FSA investigators to be greeted with blank expressions when they ask why the risk profile has leapt so high.’
Wheatley said the FSA’s recent review of banks’ wealth management divisions had raised concerns.
‘So the preliminary results of our latest review into the wealth management divisions of six retail banks are worrying. We’re worried that the FSA has picked up concerns both over the suitability of investment portfolios, as well as banks’ ability to demonstrate suitability, in a significant number of customer files they sent to us,’ he said.
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