Another year – but has the FCA highlighted any new issues?

Senior Managers, with the help of Compliance, should be pawing through the FCA 2016/17 Business Plan and Risk outlook as we speak.  But are the themes and focus different from last year?

Lets just turn our attention to the Risk Outlook and see what is highlighted in this year’s “magnificent seven”;

  • Pensions
  • Financial Crime and Anti Money laundering
  • Wholesale financial markets
  • Advice
  • Innovation and technology
  • Firms culture and governance
  • Treatment of existing customers

With such weighty topics we had to expect some repeat of previous highlighted risk. What can we expect?;


Review of Retirement Outcomes – the FCA will review the impact of the significant pensions reforms and their impact on competition and switching in the market (watch this space!).  This will include consultation on early exit charges and the ability of customers to transfer their pensions more freely.

Financial Crime and AML

Expect continued due diligence on firms and individuals applying for authorisation, especially those who could carry a higher inherent risk of money laundering. And a greater focus on scams and the ability of firms to protect themselves.

Wholesale financial markets

In 2016 firms should complete the implementation of EU Market Abuse Regulation (MAR) and be readying themselves for Markets in Financial Instruments Regulation (MiFIR) in January 2018.  There are references here to the spectre of the new Senior Managers regime (to replace the Approved Person Regime in 2018) for the remainder of authorised firms not already covered (see Culture and Governance).

The asset management market study will continue to see if competition is working effectively, and whether or not investors are getting value for money (watch for further initiatives from fund providers to stay ahead of the regulator here!)


The Financial Advice Market Review (FAMR) was established to identify ways to bridge the advice gap and was published in August 2015.  This year the FCA will be encouraging innovation, competition and new entrants to the market.  Be aware of the new routes to markets offered by your competitors; be clear on what you offer and who you serve.

Culture and governance

Firms need to start preparing for the introduction of the Senior Managers and Certification regimes.  That means making sure your individuals are fit and proper. And the process is not just deemed a tick box exercise. Understanding how culture might produce poor outcomes for customers is still a key priority. The FCA will continue to demand high standards of conduct, backed by supervision and enforcements where required.

Treatment of existing customers

Focus here will be on competition in retail banking and cash saving markets, as well as fair treatment of long standing customers in the life insurance sector.  Which some might say is overdue and badly needed.

Under each of these areas of focus is listed the headline issues, the risks it poses to the markets and most importantly the desired outcomes the regulator expects. Therefore, we would recommend you take note of these desired outcomes. Think about how you evidence that all of these outcomes are being met within your firm. Will they satisfy the regulator?

Please contact us should you have any questions with regards to meeting or evidencing any of the above issues.

Access to the full FCA Business plan can be found here.

Julia Kirkland

Managing Partner