The wealth management sector has paid out £3.8m (€4.3m, $4.7m) in fines issues by the FCA this year a Freedom of Information (FOI) request by Oxford Risk has revealed.
The behavioural finance expert also warns that the sector could risk the penalties increasing in the wake of Consumer Duty.
The £3.8m in fines levied on the adviser and intermediary, platform and wealth management categories equates to approximately 7% of the total £52.8m in fines imposed by the regulator in the year to date.
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Oxford Risk’s FOI request also showed that the worst year in terms of fines was 2022 which saw £21.8m paid by the sector contributing 10% to the overall amount of fines collected by the FCA.
James Pereira-Stubbs, chief client officer at Oxford Risk, said: “The wealth management sector including advisers and intermediaries and platforms works hard to deliver good customer outcomes, so it is disappointing to see as much as £3.8 million paid out in fines.
“The worry is that the introduction of Consumer Duty could lead to the level of fines rising even further and the issue is that very often the fines and damage to consumer outcomes are entirely avoidable if wealth managers make use of the tools and solutions that are available.
“Wealth managers need to document behavioural biases and risk tolerance as part of their suitability systems and processes and crucially need to understand how to act upon the information to ensure good customer outcomes.”
