FCA publishes private bank conflicts review: FCA has published the results of its thematic review into conflicts of interest arising from wealth management and private banking firms’ use of in-house investment products (IHPs) in retail discretionary and advisory investment portfolios. Although it found some matters to follow up with individual firms, it was generally pleased with levels of compliance and sees no need for further action. The review covered 18 wealth management and private banking firms. FCA found that firms recognised the potential conflicts risks, and specifically noted its pleasure in seeing:
- a heightened focus by senior management on conflicts of interest in relation to IHPs;
- no evidence of unsuitable remuneration structures; and
- consistent processes for conducting due diligence on IHP and third party products and monitoring their subsequent performance.
It suggested firms could make certain improvements around:
- articulating how IHPs fit within their business model and strategy, and align with customers’ interests;
- monitoring the level of IHPs in customer portfolios; and
- being clearer in communications with customers about the extent to which IHPs might feature in customer portfolios.
FCA speaks on new competition powers: Deb Jones, director of competition at FCA, has spoken on the implications of the new competition powers which it will be able to exercise from April 2015 and their implications for the financial services industry. She outlined where FCA will fit within the existing competition landscape and how it will operate alongside, and cooperate with, the Competition and Markets Authority and European Union competition authorities. She stressed that FCA is already in a position to detect anti-competitive practices within the industry and that its new powers under the Competition Act 1998 and the Treaty on the Functioning of the European Union will enable it to take appropriate action where abuse is detected. She also outlined the extension of FCA's powers to observe and analyse the market under the Enterprise Act 2002. (Source: FCA Speaks on New Competition Powers)
Up next from FCA: FCA's latest Policy Development Update promises, before the end of 2014, a:
- consultation on policy proposals for the 2015/16 fees and levies;
- policy statement on retirement reforms and the guidance guarantee;
- consultation on benchmarks; and
- consultation on reforms to the Dispute Resolution sourcebook as a result of Alternative Dispute Resolution and other changes.
(Source: Policy Development Update No 17)
FCA publishes credit card study ToR: FCA has published the terms of reference (ToR) for a market study into the retail credit card market. It is looking particularly at how easy it is for consumers to find the right card for them, how firms recover their costs, and issues around unaffordable lending. It asks for feedback on the scope of the study by 5 January 2015. (Source: FCA Publishes Credit Card Study ToR)