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Dear CEO | Release Date: 8th November 2023

To read a shorter summary of this Dear CEO letter, click here.

To access the original FCA document, click here.

Long Summary

The Financial Conduct Authority (FCA) has issued a comprehensive guidance letter to CEOs of wealth management and stockbroking firms, delineating the agency’s updated supervisory priorities and expectations. The letter underscores the dual focus on preventing financial crime and fulfilling Consumer Duty outcomes, and places accountability on the leadership of these firms to adhere strictly to FCA requirements.

Sector Analysis: Key Risks and Harms

Financial Crime

The wealth management and stockbroking sector is highlighted as inherently susceptible to financial crimes, such as money laundering and fraud. These crimes not only result in significant consumer financial losses but also cause broader economic, market, and social damage. The FCA emphasises that these activities often have links to severe criminal activities, including human trafficking and terrorism.

Consumer Protection Failures

The sector has faced criticism for exposing consumers to high-risk or overly complex investments that offer poor value. With 1.8 million portfolios and 14.3 million stockbroking accounts under management, the scale of potential consumer harm is considerable, marking the sector as high-risk within the financial services industry.

FCA’s Updated Supervisory Priorities

Preventing Financial Crime

The FCA’s expectations for preventing financial crime are stringent:

Ensuring Consumer Duty Outcomes

The Consumer Duty requires firms to prioritise consumer needs effectively, ensuring that:

Pricing and Value Standards

The FCA criticises the practice of charging for undelivered services and highlights the necessity for firms to:

Strengthened Supervisory Measures

The FCA is enhancing its supervisory approach to be more assertive and data-driven:

Comprehensive Regulatory Obligations

In addition to the specific harms addressed, firms must remember their broader regulatory obligations such as:

Engagement and Communication with the FCA

Firms are urged to maintain proactive communication with the FCA, especially regarding any remedial actions or identified harms. This includes:


The FCA’s letter is a clear mandate for wealth management and stockbroking firms to elevate their operational standards and compliance measures. By adhering to these guidelines, firms can mitigate risks, enhance their reputations, and contribute positively to the overall stability and integrity of the financial services industry. This collaborative effort is aimed not only at compliance but also at fostering an environment where consumer trust is maintained and financial crimes are vigorously combated.

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