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Will Ashcourt Rowan's fine bring down the curtain on ‘old fashioned’ broking?
by Danielle Levy on Nov 27, 2012 at 10:49
‘The FSA expects investment managers to have a grip on what they are doing. Firms can no longer say to their investment managers that they can get on with it. One of the challenges of the future is to ensure those investment managers toe the line and this continues to be a challenge.
‘Many investment managers are caught up in the stage where they say, “This is my client. I will run the portfolio as I see fit”. A bit of education needs to go on. I thought the fine was not a surprise. The only surprise was that it has taken so long to get to this point,’ Couch told Wealth Manager.
Another senior director from a large wealth management business suggests the Ashcourt Rowan fine indicates a breakdown in communication between wealth management firms and the regulator.
Perhaps cynically, he suggests the industry could face a growing number of fines as staff from the regulator look to raise their profile ahead of the regulatory reshuffle.
‘One of the problems with the FSA closing down is that a lot of new people want a new job in the new entity and want to get their name up in lights. It is almost an incentive for some of these people in the FSA to get the boot in.
‘They are not making it easy for anyone at the moment, whereas if you look back to the old days, you could speak to the regulator and there was good communication,’ he said.
Have firms taken heed of FSA warnings?
There is no denying there are inherent weaknesses in record keeping and infrastructure at a number of firms, however.
‘Suitability should have been at the forefront of everyone’s minds for a long time, but I think businesses have been lazy or ignored noises made and now they are struggling to catch up, whether it is in record keeping or how they do business.
‘There are some that are behind the curve, and those that are ahead are also finding the expectations placed on their business around suitability quite onerous, as there is now more detail than was ever required before,’ the source added.
Robert Hupe, a consultant at Knadel who has run ‘suitability health checks’ at several companies, suggests the Ashcourt fine indicates that the FSA is ‘putting its money where its mouth is’.
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