Long-term savings and pensions In connection with long-term savings and pensions the focus is effective due diligence for retail investment advice, in particular around suitability; sales practices at retirement; fair treatment of long-standing customers in life insurance, governance of fca business plan and risk outlook 2015 funds, described as "zombie" funds; use of in-house funds in wealth ADDLESHAW GODDARD LLP 1 3 management firms and the management of related conflicts of interest; and client take-on risk for contracts for differences "CFD" providers.
Legal advice should be taken before applying any information in this document to any facts and circumstances. Implementation is currently expected to happen in Assessing these mid-term risks is the foundation of our planning process.
We have historically seen a number of examples of how poor culture can result in severe customer detriment and undermine markets, such as the sale of PPI products and attempts to manipulate foreign exchange benchmarks.
Market volatility has the potential to create capital losses, some of which may be unforeseen by investors who may not have understood the inherent risk of these often very complex products, resulting in unexpected losses.
They present a challenge to the position of established intermediaries, stimulating competition and meeting a clear need from businesses that often have limited conventional funding options. Sector impact Retail Key developments impacting the retail banking sector include: In response to the reassessment of growth prospects and uncertainties, markets have become more volatile recently, including falls in equity and some commodity prices and exchange rate movements.
New technology — risks and rewards Blockchain technology represents an alternative approach to the safe storage of information of value such as trade execution, clearing and settlement and custody.
What should firms be doing? It looks at what causes risks to arise, including changing environmental pressures, and sets out how we consider the risks we have found across the financial markets. Although nominal wages are increasing, with an increase of 2.
For example, the Government has introduced policies which aim to increase house building, widen access to the housing market and improve affordability. Such changes to business models might create risks to consumers and market integrity.
Seven forward looking areas of focus which present particularly significant risks are outlined in both the Risk Outlook and Business Plan: New thematic reviews for will look at culture change programmes in retail and wholesale banks; inducements and conflicts of interest relating to retail investment advice; the role of Appointed Representatives; conflicts of interest inherent in the operation of dark pools; compliance of funds with their responsibilities to investors; retirement sales practices; the collection of unsecured debts; and staff remuneration and incentives in consumer credit firms.
This focus on price alone may also affect competition on other product features. Younger people are, in many cases, starting work later than their parents did, often with higher levels of debt, as is shown in figure 9, including student loans.
The global outlook is influenced by ongoing and new economic or political shocks, such as geo-political tension and global political uncertainty, an ongoing slowdown in emerging markets, specifically commodity exporters and highly indebted emerging markets, lower trade and investment and unexpected monetary policy decisions.
Q2 Fair treatment of long-standing customers in life insurance, RDR post-implementation review. This has increased borrowing and savings options for consumers, though as with more traditional business models of lending and borrowing there needs to be a focus within the lending chain on underwriting standards, and an awareness by lenders that the peer-to-peer business model does not provide consumers with depositor protections.
Alternative models Advanced technology has been used by specialised external firms, allowing financial services firms to reduce costs and improve services by outsourcing processes to these specialists.
Third, is technology an opportunity or a threat? In some parts of the wholesale markets, potential over-reliance on a small number of large clients, or on clients who have a dominant market share, may cause some firms to be reluctant to report suspected misconduct.
It has the potential to increase competitiveness, innovation and efficiency, creating real benefits for both consumers and firms.
Consumers may buy products that they do not understand or that are not appropriate for their needs and which leave them exposed to higher losses.
Strategy and priorities The FCA identified five key priorities for Non-regulated firms are moving into financial services. Developments in application programming interfaces may increase the feasibility of smart comparisons. The expanding use of technologies such as Blockchain and Cloud technology can have benefits for individual firms and competition as they may disrupt existing business models.
They can offer innovative products and services which provide alternatives to those of traditional firms, challenging their business models and changing how third parties operate in financial markets.
However, in maintaining market integrity we need to understand which developments can potentially damage confidence in, and access to, financial services. The seven areas of focus in the Risk Outlook set out the risks that firms should be mindful of over the coming years when developing their strategies and as part of their product governance processes.
New market studies for will focus on non-advised sales of investment and protection products; how insurance firms use Big Data; retirement sales practices and outcomes; investment and corporate banking; charges paid by investors in asset management; and the mortgage market.
It analyses the fundamental causes of risk and how these affect the financial services market and its participants, both retail and wholesale.
Pension tax relief has been reduced, auto enrolment has been introduced and the pension freedoms give consumers much greater choice in how they access their pension savings.
These attacks are inevitable but firms need to ensure that they have defences and plans in place to deal with them.
The Business Plan and Risk Outlook map out an ambitious programme of work. As part of our normal activities, we are considering the issues that may arise, and that could have the potential to impact our objectives.
Extracts may be copied with prior permission and provided their source is acknowledged. This annex should be key in planning for potential FCA focus and intervention.year’s FCA Outlook and Business Plan remain, but their focus is slightly altered to closely monitor the increased choices available and the risks that may flow from innovation and a.
Summary of the FCA’s Risk Outlook & Business Plan /16 The FCA’s Risk Outlook and Business Plan /16, including the major risk areas identified by the FCA and the areas of regulatory focus for the coming 12 months.
The Business Plan and Risk Outlook sets out the activities that the FCA intends to carry out in /15 to protect consumers, enhance market integrity and promote competition and its approach to.
APRIL FCA Business Plan / and Risk Outlook The key points Introduction On 31 Marchthe Financial Conduct Authority (FCA) published its / Business Plan and Risk Outlook.
Chapter 1 – Risk Outlook An assessment of risk forms the cornerstone of our planning process. From this we create a Business Plan that focuses our resources on priorities, while retaining some flexibility to respond to emerging issues.
Yesterday, the Financial Conduct Authority (FCA) published its Business Plan.
Firms should read this document closely, as it outlines the FCA’s view on the key risks to its objectives, its priorities, and the activities it intends to undertake inDownload