PIMFA joins financial services trade bodies in calling for Chancellor to intervene over FCA proposals to publicise enforcement investigations

29 April 2024

PIMFA joins financial services trade bodies in calling for Chancellor to intervene over FCA proposals to publicise enforcement investigations

PIMFA, the trade association for wealth management, investment services and the financial advice and planning industry, has joined with 15 other financial services trade associations, including UK Finance, TheCityUK, the Association of British Insurers (ABI), and many others in writing to the Chancellor of the Exchequer, Jeremy Hunt, calling on him to intervene over the Financial Conduct Authority’s (FCA) proposals to publicise enforcement investigations of firms.

At present, the regulator only publicises enforcement action if a financial services firm is found guilty of misconduct or to have breached the FCA’s regulations. The FCA’s proposals to publicise enforcement investigations therefore represent a worrying development.

Liz Field, Chief Executive of PIMFA, commented: “It is very difficult to see how the FCA’s proposals to publicise enforcement investigations will be of benefit to either consumer confidence and trust in financial services or to the integrity of the market overall.

“The FCA’s argument that an enforcement investigation does not automatically mean that there has been misconduct or breaches of its requirements seem to us to show a degree of naivety around the way the real-world works. An announcement of an investigation will lead many to believe there is no smoke without fire and assume guilt on the part of the firm being investigated, particularly if this is fuelled by press speculation.

“For smaller firms, the impact could be devastating, with clients leaving in droves despite there being no immediate evidence of actual wrongdoing on the part of the firm. Larger listed firms will almost certainly be subject to significant market volatility because of shareholder action or could see significant outflows of assets – potentially leaving them hollowed out.

“We cannot understand how these proposals support the FCA’s role of promoting UK competitiveness and economic growth, while ensuring consumer confidence through the way in which it supervises and regulates the industry. The proposals appear to contradict the former and do little to promote the latter.”

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Notes for Editors

About PIMFA – the Personal Investment Management & Financial Advice Association

• PIMFA is the trade association for firms that provide wealth management, investment services and the investment and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
• PIMFA was recently named as one of the Best Places in the UK to work by The Sunday Times.
• The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.
• PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.
• PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
• PIMFA has made numerous recommendations to the FCA regarding the Future of Advice, Future of Supervision and the FSCS levy – read more.
• PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.
• Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

Matthew West, PIMFA PR Manager – MatthewW@pimfa.co.uk, +44 (0)20 7382 0376

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk, +44 (0)20 7011 9869 / +44 (0)7979 49322