Financial advice firms have been told by the regulator to consider using the new senior manager rules to clear out sales dinosaurs from management.
David Blunt, head of conduct specialists at the Financial Conduct Authority, said financial advice businesses need to start getting ready for the Senior Managers and Certification regime applying to them from December 2019 onwards.
Speaking at a City & Financial conference today (16 October), he said advice businesses should look at how some banks used the rules to clear out bosses who were no longer fit for 21st century business.
He said: "The experience of banks has helped us shape the regime we have now finalised for all other firms.
"For solo firms, although we only have near final rules that is just because we need secondary legislation. You can rely on those rules for preparing for December 2019."
He explained: "Where we want to get to is for firms to have a real sense of personal responsibility for all they do in financial services.
"In the run-up to day one with banks there was a focus on the senior managers regime. Senior managers are the only group of people who continue to need approval from the regulator before they carry out their jobs.
"Take the opportunity to think about who is in the top team. Are sales people who have risen to the top the right people to be leading today? There is an opportunity for firms to make changes."
Under the Senior Managers and Certification regime, bosses performing key roles need FCA approval before starting work and receive a 'statement of responsibilities' that clearly says what they are responsible and accountable for.
Firms must also provide 'responsibilities maps' setting out the responsibilities of their senior managers, and their management and governance arrangements. At least once a year firms need to certify that senior managers are suitable to do their jobs.
Mr Blunt said: "By day one of the new regime it is important to have landed on who are your senior managers and to have your statements of responsibilities laid out.
"It is never too soon to start. The clarity of responsibility you must then articulate in statements will help you run your businesses better."
Keith Richards, chief executive of the Personal Finance Society, said the Senior Managers regime is intended to focus senior management responsibility and attention on the behaviours, activities and culture of the people they are accountable for.
He said: "If the FCA are suggesting there is evidence that some old guard are acting inappropriately, I would expect them to act as the supervisor rather than suggesting that Senior Managers regime is the appropriate tool."