The Financial Conduct Authority has today (31 March) revealed it is set to launch an investigation into due diligence undertaken by investment advisers to “ensure that consumers are sold suitable products and services”.
The probe is one of a number of areas of new supervisory work that the watchdog intends to carry out in the 2014/2015 financial year, details of which have been revealed in its business plan, published this morning.
Also revealed in the plan, the regulator has projected an increase in expenditure over the coming year to £452m, as a result of which it will require an increase in funding of £14m to £446m.
It has therefore said it will collect close to £403m in fees from firms, 2 per cent more than the £393m it took last year. While a lower increase than in recent years, the announcement of another year of increase is likely to prompt further anger in the industry.
The biggest increase in costs will come from staff, expenditure on which is rising £2.5m to £263.8m, and technology support, costs for which are increasing by £11.8m to £88.2m. Spending on enforcement action is forecast to drop £5.3m to £11m.
Supervisory work to be carried out in the coming year includes a probe into “long-standing” insurance contracts, the controversial piece of work that was leaked last week and which is said to have created a “disorderly market” in life insurers’ shares on Friday.
The gaffe, branded by Treasury Committee chairman Andrew Tyrie an “extraordinary blunder”, has led to calls from some for chief executive Martin Wheatley to step down.
The FCA will also investigate the use of in-house funds at wealth management firms, sales practices for those approaching retirement, and governance of with-profits funds.
