FCA’s latest portfolio strategy letter to CEOs has been sent to platforms. It starts by making the point that it expects firms will have used the SMCR to ensure clear accountability within senior management and for individuals to clearly understand their roles and responsibilities.
FCA sees that the sector has grown rapidly in terms of assets under administration and customers in each of the advised, direct to customer and workplace channels. So it will focus on addressing:
- technology and operational resilience, not only for ensuring that operational resilience takes into account the interests of customers and importance to market participants of the firm being able to ensure continuity of service but also that the firm understands when it may incur reporting obligations whether in relation to cyber-attacks or otherwise;
- third party outsourcing, so that firms have clear contractual arrangements with third parties, and review the performance of service providers regularly; and
- conflicts of interest, to ensure these are properly identified and managed.
FCA also notes firms should be considering whether they need to make any changes to implement the Investment Platforms Market Study findings and recommendations. It particularly points firms towards the recommendations on transfers, best execution and costs and charges information.