Firms have not changed the way they assess clients' suitability in 20 years, but new guidance from the FSA pulls no punches, writes Bob Freeman, vice-president of Voyant UK.
The FSA has come out fighting in its latest guidance consultation on assessing client suitability. From the opening paragraph, the regulator takes a consumer-focused approach that is, in our opinion, openly hostile to the financial services industry. This in itself is impressive. The game of reforming the UK’s financial services sector has very high stakes, and the FSA has done well to provide guidance based on empirical data. It specifically calls to task the industry’s globally recognised business practice of running clients through a risk profiler, assigning an often-vague risk cat...
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