The FSA has written to the chief executives of major insurance brokers and investment firms repeating its concerns over what it calls the ‘unacceptable' handling of clients' money and assets.
In a report accompanying the letter, the regulator highlights a series of failings across firms it visited last year.
These include poor management oversight and control, a lack of established trust status for segregated accounts, unclear arrangements for the segregation and diversification of clients' money, and incomplete or inaccurate records, accounts and reconciliations.
Today's letter follows one sent to firms in March 2009, which explained a firm's obligation to protect client money and assets.
Last year the FSA visited a range of firms and found a number of failings, leading the regulator to compile its latest report highlighting some of the weaknesses it discovered.
The FSA has already acted against a number of the firms it visited, including referring two firms to enforcement, freezing a firm's assets and commissioning skilled persons reports.
Over the course of the year, the FSA says it will be increasing its visits to firms to assess how well its guidelines are being met.
Sally Dewar, managing director of risk, says: "The client asset rules are a key protection for consumers. It is simply unacceptable that firms are not ensuring that consumers get the appropriate protection.
"We have pointed out our concerns to firms and will be following up these concerns with further visits this year."
Hires Wellington Management
Introduces 'The Long Dog'
Continuing Square Mile’s series of informal interviews
Happy GDPR day