Changes are afoot: The ones to watch in 2024

Posted on January 25, 2024May 16, 2025 by Vicky Pearce

Last year was pretty significant in the world of FCA compliance. Consumer Duty dominated the headlines and fundamentally transformed the way the industry operates.

So, what does the FCA have in store for us in 2024? Certainly, the pace of regulatory change shows no sign of slowing down.

Now we’ve shrugged off the post-Christmas inertia, we thought we’d whip out our crystal ball and take a look at the hot topics that will be keeping us busy in the next 12 months.

Retirement income advice – thematic review

We’re still eagerly awaiting the results of the FCA’s retirement income market review.

The regulator was keen to see how the 2015 pension freedoms impacted on the quality of advice clients receive, particularly following the implementation of Consumer Duty and we expect the results of this review to be key to assessing how firms have adopted the regulations.

It will probably mean work for some firms, but if a Consumer Duty benchmarking exercise was carried out, the effects may be minimal.

Capital deduction for personal investment firms

We are expecting the FCA to publish a policy statement in this first quarter, following its consultation paper on capital deduction for redress, which was followed up by a Dear CEO letter to affected firms.

There will be at least six months between the publication of the policy statement and the rules coming into force to allow firms to prepare. Implementation will then be staggered over another six months to fall in line with reporting.

We would urge you to review the consultation paper, think about the impact it may have and consider submitting a response to the FCA before the March 20 deadline.

ESG – are you ready to have the conversation with clients?

The Anti Greenwashing and Sustainability Disclosure Requirements outlined in the FCA’s November policy statement apply to all firms, so understanding and adhering to them is essential.

It is important advisers have an awareness and understanding of the rules so you can discuss ESG products clearly and accurately with consumers and we are expecting further consultation on how the regime will apply to portfolio managers very soon. If you aren’t comfortable talking about ethical preferences, it’s time to take action to plug the gap.

The definition of vulnerability

We believe how you define vulnerability and how you identify and treat vulnerable clients will come under much more scrutiny this year.

Consumer Duty placed the emphasis on good customer outcomes and a questionnaire issued to stockbrokers and wealth managers before Christmas asked specifically for their definition of vulnerability and how many vulnerable clients they have. This leads us to think there is going to be more focus on how firms make sure staff can identify vulnerability and what action should be taken when they do.

Advice Guidance Boundary Review

A discussion paper released before Christmas set out proposals for bridging the gap between financial advice and other forms of consumer support.

The FCA wanted feedback by the end of February, so we will know later in the year if the rules surrounding simplified advice are any clearer.

The paper proposes plans to help consumers better identify their financial needs and access fair value advice, plus support for firms who want to help retail customers but fear drifting into the realms of advice.

It will be interesting to see if the final guidance makes things clearer. Our initial reaction was that it might help large organisations, such as banks, but it is still going to remain an area fraught with risk for IFAs.

Politically exposed persons (PEPs)

In September, the FCA announced a review of the treatment of PEPs based in the UK by financial services firms.

PEPs and sanctions have not been assessed since 2017, so expect changes to be on the way. The results are expected by the end of June and the regulator has promised to take prompt action if any significant deficiencies are identified.

Consumer Duty is not going away

Yes, we know you’re sick of hearing about it, but the milestones are going to keep on rolling around anyway. July is the deadline for submitting your first board report and at the end of the same month, the duty will apply to all closed products and services as well.

Hopefully you’ve found this whistlestop tour of the main regulatory issues helpful. We will be providing more information as it becomes available and will ensure our clients have the tools and assistance to make any necessary changes to their policies and procedures.

If you have questions regarding any of the changes outlined here, don’t hesitate to contact us on (0161) 521 8641 or email: info@b-compliant.co.uk

Vicky Pearce, Director, B-Compliant

vicky@b-compliant.co.uk

To find out more about how B-Compliant can help, please visit https://b-compliant.co.uk/

Morningstar Investment Conference UK

The Morningstar Investment Conference provides financial advisors and experts with an opportunity to remain up to date with the latest research, insights, and analysis, enabling them to better serve their clients.

As investors evolve and markets change, it is essential for advisors to continually develop their practices to meet the needs of today’s investor.

Ensure that you are equipped with the knowledge and tools necessary to thrive in this ever-evolving industry.

For further information and to book your place click here

PIMFA Under 40 Leadership Committee Report 2023 (December 2023)

Cyber risk management – a board level responsibility

Posted on December 11, 2023May 16, 2025 by Lindsay Hill

Senior leaders must step up to counter a growing threat

Cyber risk management is a critical senior leadership responsibility, due to the escalating cyber threat landscape and the profound impact of cyber incidents on business operations, reputation, and financial stability. A ransomware attack can bring a business to an abrupt halt and in some instances close it down.

It is no surprise that so many business victims feel forced into paying the ransom demand when so much is at stake. Obvious high-risk sectors include professional services such as private equity, financial services businesses, accountants, law firms and any firm handling confidential data and transactional work. The reality, though, is that the healthcare sector, factories, car dealerships, retailers and so many others are at operational risk too.

All senior business leaders have a responsibility to manage their cyber risk to safeguard sensitive information, maintain operational continuity, and protect stakeholder interests. The Information Commissioner’s Office and regulators including the FCA require this too. Leaving cyber risk management to their IT support simply does not cut it. Proper cyber risk management is a sophisticated stand-alone discipline, covering so much more than just technology. It requires a comprehensive programme, with formal risk assessments, policies and procedures, and staff training.

Good cyber governance should include obtaining independent assurance from a cybersecurity specialist – someone who will assess and provide visibility of your cyber risks, determine the measures appropriate to control those risks, and give you ongoing assurance that the controls you have in place continue to be effective.

There are two key aspects to ensuring success:

Independence – because having IT mark their own homework is a nonstarter when it comes to good risk management.

Expertise – because cybersecurity is complex and ever-changing, and you need a specialist who understands your business structure and the current methods of attack, as well as your legal and any regulatory obligations.

Cyber breaches do not result from bad luck. A serious breach means that someone at the most senior level has failed to understand what was required to protect their business and has not done their job properly. And if you haven’t yet assigned responsibility to someone at Board level, your business really is living on borrowed time.

Written by Lindsay Hill, CEO at Mitigo Cybersecurity

TAKE A LOOK AT MITIGO’S FULL CYBERSECURITY SERVICE OFFER.

FOR MORE INFORMATION, CONTACT MITIGO ON 0208 191 9913 OR EMAIL MAILTO: PIMFA@MITIGOGROUP.COM

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PIMFA Consumer Duty Conference 2024

The Consumer Duty is one of the most significant regulatory initiatives in recent years with the FCA considering it a major step change for financial services, requiring firms to make lasting changes to culture and behaviour to consistently deliver good outcomes.

Following the success of 2023’s conference, put on for PIMFA member firms planning ahead of the implementation deadline, we will be reconvening the group to consider the state of play after seven months of the Duty – where implementation has worked well, where the sector still has work to do, and how much of a tangible impact has been made on living up to the ideals aspired to by the regulatory impetus.

The conference will look into how firms have reviewed their product suite, communications and end-to-end customer journey, and how changes have been made in areas such as governance, MI and reporting, product design, pricing, distribution, servicing and staff training.

Register to hear from key industry experts on the key themes of consumer duty. We welcomed a high-level audience who engaged with the experts, to facilitate fruitful discussions with opportunity for questions and networking.

If you’d like to find out more information on attending, speaking or sponsoring the event please contact events@pimfa.co.uk

This event sold out in 2023 and is likely to sell out again, so early booking is highly recommended.

The early-bird discount is valid until 22nd December 2023

Event Details:

Date: February 28 2024

Time: 10:00 – 18:00 (subject to change)

Venue: Shoosmiths, 1 Bow Churchyard, London EC4M 9DQ

PIMFA Women’s Symposium 2024

PIMFA is delighted to announce its inaugural Women’s Symposium!

The Women’s Symposium is PIMFA’s inaugural annual summit dedicated to the investment management, financial advice and wealth management communities. Taking place over two days, the summit will feature cutting edge though leadership, high profile speakers, and lively discussions on a range of topics, including personal development, the latest investment trends, and practice management. The event will create a collaborative space for professionals to network, learn and share best practice from across their professional world.

The symposium is FREE to attend for PIMFA members and associate members and solely funded by our wonderful sponsors, and we encourage individuals at all stages of their career, from Chief Executives to Interns, to join us for two days of motivational talks, regulatory updates, industry panels, personal development roundtables and thought-provoking content related to our industry, and to career development.

Registration is open. There will be an initial limit of 10 tickets per firm, on a first-come, first-served basis.

If you’d like to find out more information on attending, speaking or sponsoring the event please contact events@pimfa.co.uk

Details:

Dates: 16 & 17 April 2024
Venue: Radisson RED Heathrow Hotel, London
FREE for PIMFA members to attend (limit of 10 tickets per firm). Non-members will also be invited to attend, however, a fee will apply. Registrations will open in January 2024.

ESG Oversight: Walking the Tightrope Between Promise and Peril

Posted on November 22, 2023May 16, 2025 by James Pearce

ESG investing has become mainstream as it has the potential to both improve society and provide investors with a strategic advantage in terms of long-term financial performance. Companies with strong sustainability practices should be better positioned to manage risks and seize opportunities, which translates into more sustainable long-term results, according to research and market trends. But there are several nuances in this world of ESG investing, the most important being the problem of greenwashing.

Overstating or misrepresenting one’s dedication to, and accomplishments in sustainability standards is a practice known as “greenwashing,” and it has grown to be a serious concern. Indeed, a recent ESG Global Study from Capital Group included the survey result that “50% of investors think that greenwashing is prevalent within the asset management industry”.

Whilst many cases of financial greenwashing are unintentionally caused by inadequate monitoring and processes, there have also been several high-profile cases where certain funds have turned to inflating their sustainability credentials to attract capital, since investors are beginning to consider environmental and social impacts more and more when making decisions. In addition to misleading investors, this disparity between commitments and actual practices compromises the credibility of the firm. Greenwashing has far-reaching consequences, such reputational damage, dissatisfaction among investors, and likely legal, regulatory and financial ramifications.

Investors who deal with fund-of-funds structures or who depend on external asset managers have an even greater issue when it comes to visibility of their environmental and social risks. In these cases, the oversight process becomes more complicated due to their distance from the underlying assets. Such investors, and even the fund-of-funds operators, may find it difficult to determine if the ESG mandates are being fulfilled. Relying on underlying investment managers and aggregating multiple disclosures from different sources becomes an impossible task due to different data sources, calculation methodologies, scoring standards and quality of reporting.

This emphasises how important it is to have strong sustainability oversight procedures integrated into the firm’s processing capability. A thorough, auditable and regular examination of the individual metrics of the underlying instruments, as opposed to a cursory and sporadic review of high-level ESG ratings and reports, is essential to effective monitoring. It calls for an exacting, data-driven methodology built into the core business processes that can separate fact from fiction to ensure that words are matched with deeds when it comes to ESG compliance.

Nevertheless, conventional approaches to ESG supervision frequently fall short in negotiating these complexities. They are often unable to keep up with the changing ESG regulatory landscape, and they frequently do not have the granularity necessary to uncover the truth about greenwashing. As a result, the industry requires more stringent monitoring procedures that use technology and analytics to provide a more complete and transparent picture of ESG practices.

Specialised ESG oversight solutions, as opposed to legacy systems with manual, spreadsheet-based workarounds, are needed to provide investment institutions the clarity they need to make informed decisions. An important requirement is the ability for investors to ‘look-through’ multi-tiered portfolios and monitor ESG metrics in a way that goes beyond simply checking boxes. Given the scale and depth of investment hierarchies, this is a deceptively very complex, costly, error-prone and time-consuming task when done manually.

Furthermore, effective ESG supervision is essential to risk management. It assists in identifying possible dangers and areas of non-compliance before they develop into more serious problems by giving a comprehensive picture of ESG practices over time. An “ESG Book of Record” is required to validate and maintain a history of the portfolios’ adherence to its environmental and social mandates. In a time when ESG variables can have a big impact on reputation, regulatory compliance, and ultimately financial success, this proactive approach to risk management is essential. Furthermore, given the ever increasing regulatory and investor scrutiny of a firm’s sustainability credentials, a scalable oversight solution can help turn compliance into a competitive advantage with the resulting transparency becoming a selling point for attracting new business. With the UK’s forthcoming SDR guidance expected to be published before year-end, now is an important time for firms to prepare themselves for the future.

In conclusion, the investing community needs to adopt improved, automated supervision systems that provide accurate, detailed, and transparent ESG reporting and analysis. Having a scalable solution is a must in a future where the capacity to efficiently monitor and validate ESG criteria will be essential.

James Pearce, Co-Founder, Know Your Funds

james.pearce@knowyourfunds.com

To find out more about how Know Your Funds can help, please visit www.knowyourfunds.com

Is more personalisation the answer?

Posted on November 19, 2023April 30, 2025 by Nigel Ross-Scott

For many, the first steps on the investment ladder are difficult to take and, with the Money and Pensions Service suggesting that 47% of UK adults do not feel confident making financial decisions, this indicates that a significant proportion of the UK population are as far away as ever from achieving peace of mind in their retirement. Consequently, engagement and how we achieve it is a permanent issue for the financial services industry.

To delve deeper into this, PIMFA commissioned some research, working in conjunction with market research company Savanta, seeking the views of 500 adults who described themselves as either advised investors, DIY investors or non-investors. Each had more than £10,000 of investable funds.

Through this research, we wanted to test our own hypothesis that providing non-advised consumers with targeted, personalised guidance to encourage investment decisions would help more people overcome the behavioural barriers which prevent them from investing. In this area, our findings are a little disappointing.

The resulting report – ‘A Little More Personalisation’ – shows that a significant majority of non-investors said they probably, or definitely, would not start investing within the next 12 months. The reasons given for this ranged from perceptions of the investment world as intimidating, a lack of exposure to investing within their social circles and feeling emotionally apprehensive or overwhelmed about investing. Moreover, only just under half of the non-investors polled understood the risk of the value of their cash savings being eroded by inflation over time.

Tellingly, among those that described themselves as investors, the reason cited by 45% of advised investors and 31% of DIY investors for them beginning their investment journey was hearing about the investment experiences of friends, family or others within their social network.

But, as per our premise for this research, the findings showed that the introduction of basic personalisation for non-investors would have some, but not a substantial, impact on consumer behaviour relative to the current state of play where no personalisation exists. This means encouraging people to make active decisions about their finances requires a radical change in consumer behaviour, indicating that this is a broader symptom of both financial disengagement as well as extremely strong emotional and structural barriers preventing UK consumers from being active participants in the UK investment market

It is for these reasons that we have been extremely supportive of the Government and FCA’s joint review of the advice guidance boundary. We recognise the value that certain structural changes could bring in supporting consumers to make lifechanging decisions throughout retirement, as well as encouraging them to take their first steps on the investment ladder.

But, as much as we are supportive of change, we are also realistic about how impactful these changes will be. Financial services have long been littered with interventions which seek to drive engagement among those who previously have not, or did not, want to be reached. Inertia is an extremely powerful force in this sector, and to date, initiatives that have been successful have been those that have sought to nurture rather than disrupt it.

More broadly, whilst we are alive to the opportunities here, we must also be aware of the potential risks. In considering what is permissible in future under advice and guidance we would urge the Government and the FCA to ensure that consumer protection remains at the forefront of their minds.

PIMFA welcomes Financial Services Compensation Scheme levy forecast for 2024/25

Posted on November 9, 2023March 24, 2025 by Sheena Gillett

9 November 2023

PIMFA welcomes Financial Services Compensation Scheme levy forecast for 2024/25

PIMFA, the trade association for wealth management, investment services and the investment and the financial advice and planning industry, has welcomed the news that the Financial Services Compensation Scheme (FSCS) levy will remain unchanged for the remainder of this financial year (2023/24) and the first forecasts for the levy for the next financial year (2024/25).

Simon Harrington, Head of Public Affairs at PIMFA comments: “We welcome today’s news that no additional levies will be raised for the Financial Services Compensation Scheme (FSCS) for the remainder of this financial year (2023/24). While the existence of the FSCS and the protection it provides remains a fundamental part of the financial services landscape, it remains the case that the cost of funding it represents a significant financial burden and barrier to growth for firms in this sector. More broadly, while the levy forecast for 2024/25 is lower than in previous years, indicating lower levels of consumers who have been let down, it remains the case that it is an uncontrolled cost to firms and penalises well-run firms for the failures of others.

“While we recognise that this represents a stabilisation of the cost of funding the FSCS, we remain of the view – given the likelihood of future claims working their way through the system – that FCA fines to be used to subsidise the FSCS levy, rather than being directed towards the Exchequer would represent a much fairer system and truly represent a polluter pays model the entire financial services industry agrees on. This is the fairest way to ensure consumers get the protection that they need whilst lifting a considerable burden on firms.”

NOTES TO 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.
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, the 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.
Find out more about PIMFA’s Diversity and Inclusion work – read more
Further information can be found at pimfa.co.uk

Contact

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

PIMFA Communications and PR – +44 (0)20 7382 0376

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

Further Information (Equity Risk Index Series)

If you require detailed information on the Index Series i.e. its composition/licensing feeds/historical data, please contact MSCI on 020 7618 2222 or email clientservice@msci.com
If you would like to enquire about Asset Allocation Changes to the Equity Risk Index Series, please contact indices@pimfa.co.uk
Ticker Codes for the index series are available https://www.msci.com/ticker-codes

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Cyber risks in a world of AI

Posted on November 3, 2023May 16, 2025 by David_Fleming_01

AI is a hot topic. Many professional service firms are already using AI or exploring its potential to revolutionise the way they deliver their services. But it’s not all good news. Cybercriminals are also interested in the benefits of AI and how it can make their activities more profitable. Here, we discuss the potential impact of AI from a cybercrime perspective, and provide some tips on how to mitigate the risk AI presents.

Here are three aspects to consider.

Local unauthorised use of AI tools.

Staff members may already be using ChatGPT and other AI to make their work more effective. In our cybersecurity assessments, we often see a significant footprint of AI tools that are being used locally on the employee’s computer. This is largely invisible to the business and the person who is responsible for IT or cybersecurity.

The issues here are:

Downloading of applications that aren’t subject to the appropriate level of due diligence.
Uploading business information and data into hosted AI engines where control is lost.
Loss of effectiveness of existing controls e.g. Anti-Virus will be blind to these new processes.

Take away actions:

Start with a policy that defines legitimate use and make sure it is published and understood.
Create a process to assess and approve/decline existing use cases.
Ensure local admin rights and AV settings prevent the download of applications to devices.
Toughen browser and AV settings to flag use of AI websites or websites with low trust scores.

Poor development and implementation of AI.

The core focus of development and implementation of AI will be the benefit it can bring to a business e.g. by reducing costs or increasing efficiencies. Therefore, at the design stage, security elements can often be overlooked, which in turn can lead to vulnerabilities.

The issues here are:

The development process will require you to experiment with different services and providers. This has an inherent risk as cybercriminals will move fast to insert malicious code into services (this is already happening).
You are introducing a new supplier and processes into your supply chain and these need to be controlled.
The attack surface of your organisation has changed and potentially grown. You need to ensure you design appropriate controls and security.

Take away actions:

A separate environment should be created for the development/experimentation process to reduce the risk of a malicious actor connecting to your business-as-usual network.
A due diligence process should be designed and carried out on new suppliers.
Existing policy needs to be updated to include the new technology and processes. For example, how are software patches identified and updated.
Your control framework needs to be updated. What controls, monitoring and alerts need to be created to secure the new business process.

Increased sophistication of cyber-attacks powered by AI.

The adoption of AI by cybercriminals to launch attacks and exploit vulnerabilities is arguably the biggest threat to a business. This includes enhanced ability to get round cyber training and control measures.

Some examples:

Spotting flaws in emails and websites has long been a protection against cybercrime. AI will enable greater sophistication. Social engineering can be taken to a new level as multiple approaches can be coordinated to entrap a victim.
Impersonation is often a key part of attacks. Imagine deep fakes of images and voices, and think about what the criminals could do with that.
Speed of development will increase. Every time a control stops a malicious bit of code, AI will have the ability to instantly analyse and code a solution for the criminals.

Take away actions:

Simulated attacks on staff need to be more frequent and mimic the new approaches.
Authentication and conditional access need to be improved to make the stealing of credentials ever more difficult for the criminals.
Layers of defence will be essential. If a human gets duped, ensure that there is sufficient control and alerting to stop the progression of an attack.
Assessment and assurance will become increasingly important. Frequent assessment by experts will be required to keep you hardened against the increasing sophistication and scale of attack.

David Fleming, Chief Technology Officer at Mitigo

TAKE A LOOK AT MITIGO’S FULL CYBERSECURITY SERVICE OFFER.

FOR MORE INFORMATION CONTACT MITIGO ON 0208 191 9913 OR EMAIL MAILTO: PIMFA@MITIGOGROUP.COM

A deeper dive into SDR and Investment Labels

Posted on October 27, 2023July 2, 2025 by Nigel Ross-Scott

This webinar, building on two survey reports based on our membership’s ESG sentiment published earlier this year by PIMFA and Alpha FMC, looks to dive deeper into the results, particularly as they relate to Client Preferences and Reporting, Investments and Data and SDR and Upcoming Regulation.

An overview of the survey results showed that 69% of firms are already discussing sustainable investing preferences as part of suitability with their clients, despite the current lack of a regulatory requirement to do so, but are less confident around client reporting with only 36% of firms feeling they are doing a good or excellent job of educating either their clients or, indeed, their own workforce on this topic.

Specifically on Client Preferences & Reporting, some of the panel expressed surprise that 69% of firms were already actively considering ESG preferences, bearing in mind such problems as incorporating these into a firm’s existing investment structure, identifying the gaps from both an internal and external perspective and education, again both internal and external. There were also concerns around the challenges of lack of standardisation in terminology and access to the ‘right’ ESG data from a client reporting perspective.

It was also generally agreed that, whilst a lot of funds may have sustainable characteristics, they still may not meet the label requirements so a full spectrum analysis is needed in order to understand how to serve clients in this space effectively.

On Investments and Data , the survey found that, when looking at investment strategies member firms employed, negative screening is the most common at 71%. However, the FCA has indicated that a purely negative exclusionary screening approach is not going to be sufficient to meet the qualifying criteria for sustainable investment labelling under the future regulation.

A key challenge for funds in providing meaningful information to clients is the availability of data. The survey found that 36% of firms would like support on getting access to the right investment data. Data providers offer a range of products and services, but they each have a different methodology. It is important to mention here that the Treasury recently consulted on whether regulation for ratings providers should be introduced.

Five key elements are in play regarding the data issue. First, there’s the sourcing of backward looking ESG data points for listed directly held assets. Secondly, there’s sourcing ESG data for externally held funds, which is often a big thing in our space. Third, there’s forward looking data, such as climate scenario analysis, involves both data and the ‘tooling’ thereof. Fourth is matching the ESG data points to internal datasets like holdings, which is problematic to say the least, especially where terminology is concerned. Finally, number five is how do we actually expose this information, whether that’s back to investment teams or out to clients.

The panel broadly agreed that we’ve seen a fall in demand for ESG strategies and a rotation from growth into value stocks since the Russian invasion of Ukraine. Prior to that, we’d seen a bandwagon effect where investors were investing in ESG/Sustainable because they thought they would make money but now, on the one hand, it’s about risk mitigation and returns and on the other it’s about how sustainable investment actually works.

The FCA has been listening and trying to create labels focused on retail investors, but the question remains as to whether all investments under a sustainable label are suitable for a retail investor with a low risk appetite, particularly considering impact funds or new ventures. This, in turn, raises the potential challenge of unhappy clients if firms can’t deliver on what they are suggesting.

Moving on to SDR & Upcoming Regulation, the survey results suggest that the SDR will require lots of re-alignment of existing products and services. As it stands, we need to accept that very few funds will get a label which meets what the client demand is, so more clarity is needed around how the rules may change in the future once a UK Taxonomy or other criteria are applied. This may require further re-calibration of the labelling as we can’t have a thousand different versions to suit this client here and that client there.

International alignment is essential because of funds potentially being marketed across jurisdictions and because investment managers need the correct information from companies, particularly when considering global portfolios.

Sequencing is also critically important because investment managers can only collate accurate data if the companies are reporting it. This also has a major impact when considering global portfolios that are UK-based, as many jurisdictions are not moving on the same timescale as the UK.

The prevalent view is that regulation in this space will be an evolutionary process as we collectively learn how to adapt our processes to accommodate ESG and sustainable investing models. Clarity and global standardisation of terminology will be two of the keys to success.

PIMFA Regional Roadshow – Bristol (December 2023)

Following March’s successful Roadshow, the PIMFA team are heading back to Bristol for another Regional.

The PIMFA team, along with our guest speakers, are looking forward to greeting attendees on the day.

Our Roadshows provide you with the opportunity to meet and listen to SME’s on relevant industry topics. This time we will be covering:

Agenda:

10:00-10:30 – Registration & Coffee

10:30-11:00 – Regulatory Update – Alexandra Roberts, Head of Regulatory Policy and Compliance (PIMFA)

11:00-12:00 – Understanding Cyber Risk Management in a regulated industry – Kerrie Machin, Partner, & Head of Business Development, (MITIGO)

12:00-12:30 – How local philanthropy advice can improve your client relationships – Angela Emms, Philanthropy Manager (Quartet Community Foundation)

12:30-13:15 – Networking Lunch

13:15-13:45 – Pitfalls and product confidence under the consumer duty lens – Thomas Yates, Communications Consultant, (Computershare)

13:45- 14:15 – Overcoming data quality issues to deliver positive outcomes – Duncan Stevens, Co-Founder & CEO (Gretel)

14:15 – 15:00 – Consumer Duty Update – Monitoring, Testing, MI & Assurance – Daren Allen, Partner (Shoosmiths)

Venue: Computershare, The Pavilions, Bridgwater Road, Bristol BS99 6ZZ

Networking opportunities will be available.

Attendees will receive 3 hours of CPD for full attendance. Delegates that do not stay for the entirety of the day will not be allocated CPD hours.

PIMFA continues to urge for FCA to have a role in combatting fraud

Posted on October 23, 2023March 24, 2025 by Sheena Gillett

23 October 2023

PIMFA continues to urge for FCA to have a role in combatting fraud

PIMFA, the trade association for wealth management, investment services and the investment and financial advice industry, has repeated its call for the Financial Conduct Authority (FCA) to have a greater role in combatting fraud in response to a call for evidence from the Home Affairs Committee.

In May 2022 PIMFA, giving evidence to the parliamentary committee scrutinising the Online Safety Bill, urged that the FCA should have the authority to act over fraudulent user-generated content that appears on social media and search engine platforms.

The establishment, through the Online Safety Bill, of a ‘Duty of Care’ on social media websites and search engines in the UK is a hugely important principle and a victory for all those, including PIMFA, who have campaigned over the years for this principle to be established in law. It will help prevent fraudulent content from appearing on websites and reduce scam adverts and fake celebrity endorsements. But the Bill means such communications will be regulated by Ofcom.

PIMFA believes the FCA should be allowed to provide strategic support to Ofcom to prevent harm being introduced to financial services consumers and prevent scam adverts swiftly. Such a partnership between the FCA and Ofcom would ensure that Ofcom has the expertise to identify breaches, making the Online Safety Bill more effective in preventing fraud.

PIMFA is also calling for the Government to create a single body responsible for fraud across the country to ensure a more holistic and organised approach to tackling what is the UK’s most widely reported crime. This would help to resolve the overly complex approach to tackling fraud that currently exists with multiple agencies and government departments holding various responsibilities. While the recently announced ban on cold calling is welcome, PIMFA also called for much greater international cooperation in combatting fraud given its global nature.

Alexandra Roberts, Head of Regulatory Policy and Compliance at PIMFA, commented: â€œThe current focus on fraud by policymakers is welcome, as is the Government’s commitment to reducing fraud by 10% by 2025. But we are also concerned whether the additional resources provided will be enough to obtain the required improvement and meet the commitment to reduce fraud. For there to be a difference, we believe significantly more funding is needed.

â€œWe have also repeatedly urged the Government to provide more funding and resource to Ofcom so that it will be able to regulate social media platforms and search engines effectively under the new powers given it by the Online Safety Bill.

â€œIn order to eradicate fraud PIMFA believes there must be a role for the Financial Conduct Authority in helping to identify instances of fraud that introduce obvious harm to financial services consumers, a more centralised approach to combatting fraud and much more international cooperation. We would urge policymakers to support such proposals and will continue to work with regulators and the Government to see these reforms come into being.â€

NOTES TO 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.
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.â€¯ Associate members provide professional services to the PIMFA community.
PIMFAâ€¯ 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, the 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.
Find out more about PIMFA’s Diversity and Inclusion work – read more
Further information can be found at pimfa.co.uk

Contact

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

PIMFA Communications and PR – +44 (0)20 7382 0376

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

Artificial Intelligence – The Next ‘Giant Leap’ in Financial Services

Posted on October 4, 2023April 30, 2025 by Nigel Ross-Scott

If we have learned one thing over the last couple of years, it is that the staggeringly fast uptake in the use of technology during and post-Covid will only continue. Artificial Intelligence (AI) now appears to be the next ‘giant leap’ in this process, with the Government announcing that it wants to see the UK recognised as an AI superpower and a global leader in its adoption.

Many PIMFA members are already using AI tools in their day-to-day operations and adoption of AI in financial services looks set to increase rapidly over the next few years, with the aim of improving efficiency, reducing costs, minimising risk and offering more and better client services, leading to improved consumer outcomes.

Whilst it is generally held that AI will not replace traditional human to human interaction and advice, it will support and supplement the dialogue and hopefully help to strengthen the bond between adviser and client, by being available to provide information and answer questions when the adviser is otherwise engaged, by recording information, carrying out data analysis, updating records and carrying out some of the admin tasks the adviser would otherwise carry out themselves.

However, whilst AI can be an effective and powerful ‘servant’, it also has the potential to be a bad ‘master’ if it is not fully understood and carefully managed by those who deploy it and it does come with risks that could negatively impact consumers, market integrity, and financial stability.

We are therefore keen to see a regulatory framework which allows firms to introduce AI components that will enhance their offerings to clients while ensuring appropriate levels of investor protection are maintained.

Earlier this year, the regulators asked the industry how they should regulate AI, in a joint Bank of England (BoE) and Financial Conduct Authority (FCA) Discussion Paper on Artificial Intelligence and Machine Learning (DP5/22). In our response, we highlighted that the continued success and growth of the Wealth Management and Financial Advice sector relies on establishing and maintaining a bond of trust between ‘trusted advisor’ and client.

The FCA’s discussion paper was followed in March this year by the Department of Science, Innovation and Technology (DSIT) and Office for Artificial Intelligence (OAI) policy paper, ‘A pro-innovation approach to AI regulation’

Whilst broadly supporting the AI White Paper and its proposed pro-innovation approach to AI regulation, we have also contributed to the International Regulatory Strategy Group’s (IRSG’s) response to the paper.

In this, we support a principles-based approach to regulation of AI and consider that the use of technical standards could be helpful in providing a framework for firms to develop consistent policies and procedures to support their use of AI.

In our view, there should be no need to introduce new layers of governance for AI; the existing governance frameworks are sufficient, but we would also welcome clear, consistent and timely guidance where appropriate.

From our members’ perspective, we also accept that firms will need to fully understand what any AI application is doing, how it is doing it and why, and be able to demonstrate that understanding to the regulator, identifying which components of their control frameworks and compliance processes are engaged in monitoring and managing the AI application’s activities, ensuring that it does not deviate from its stated objectives.

Further, firms using such tools also need to understand and address the risks they potentially pose and implement proportionate and efficient processes, controls and oversight to ensure they are being managed carefully and effectively and do not break that critically important bond of trust.

PIMFA will continue to advocate for an effective, flexible and agile regulatory framework which allows our industry to introduce AI components that will enhance their offerings to clients whilst always ensuring that the beneficial outcomes demanded by the new Consumer Duty remain at the forefront of the decision-making process.