Some UK wealth management firms are failing to follow regulatory requests to make sure their clients’ portfolios are suitable to their needs, the UK Financial Conduct Authority (FCA) says.
Wealth managers and private banks have “made progress” in demonstrating the suitability of their clients’ portfolios – but some need to go further in making sure investments reflect customer risk appetites.
Following a thematic review, the FCA says some firms need to make substantial improvements in client information practices as well as ensuring the portfolios they manage “truly reflect the needs and risk appetite of their customers”.
The FCA says it will follow up on these issues with the firms.
Megan Butler, FCA director of supervision, investment, wholesale and specialists, says: “It is positive that a number of firms have taken steps to improve and demonstrate the suitability of their clients’ investment portfolios. We are concerned, however, that some do not appear to have heeded the messages we have put out in recent years, and taken steps to identify and correct problems we’ve previously identified.”
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