FCA pleased with small asset management firm compliance

The FCA has published the results of its review into smaller asset management and alternatives businesses, as part of its drive to establish which business models pose the most risks of harm to consumers. It has found that most of the 410 firms with AuM of less than £1bn that it surveyed are meeting its expectations.

The main findings of the review focus on:

• high risk investments: looking to check that firms have clear and compliant financial promotion materials and appropriate investor assessment and categorisation processes;
• conflicts of interest: looking to check that, particularly in firms where staff hold more than 1 role there is recognition of potential conflicts from overlapping responsibilities and appropriate documentation of conflicts that can’t be resolved; and
• Consumer Duty: looking to check that firms understand how the Duty applies to their business model.

On the conflicts and Consumer Duty parts of the review, the FCA found some firms that did not properly understand or evidence their requirements and it working with those firms so they can make improvements.