Speaking at the annual conference of the Association of Private Client Investment Managers and Stockbrokers (APCIMs), Wheatley praised the strength of wealth managers’ and stockbrokers’ relationships with their clients, which he said had often been built up over a number of years.
But he added the nature of this relationship meant wealth managers had a responsibility to “ensure a personal recommendation or a decision to trade is suitable for their clients”.
Building on previous appeals to wealth managers, such as the “Dear CEO” letter sent out in June 2011, Wheatley said firms must have adequate systems and controls in place to deliver suitable consumer outcomes.
“It is essential wealth managers, discretionary managers and stockbrokers take into account a client’s preferences regarding risk taking and ensure their clients can bear any investment risk consistent with their objectives.”
Conflicts of interest, such as staff incentives schemes, will also need to be addressed in order to get the best possible outcomes for clients.
Wheatley warned that in the new twin-peak regulatory landscape, when the FSA formally splits into the FCA and PRA, firms will need to put consumers at the heart of whatever service they are providing and whatever products they are developing.
“The relationship the wealth management industry has with its clients is something that needs to be championed throughout financial services, because trust and confidence in financial services is more important now than ever,” Wheatley concluded.
