PIMFA Learning: Non-Financial Misconduct: Guidance and Toolkit To Avoid Non Compliance

Non-Financial Misconduct (NFM) is now a boardroom issue. Workplace behaviours such as harassment, bullying, discrimination and abuse are, in the eyes of the regulator, indicators of a poor workplace culture, lacking diversity and inclusion in your firm. High-profile cases from the past year and the recent FCA D&I Consultation Paper (CP23/20) underscore that non-financial misconduct poses a significant business risk that needs addressing.

Whether certain behaviours of individuals working in financial services, particularly outside of the workplace, fall under the FCA’s supervision’s remit is much debated; what’s not is the regulator’s belief that ‘non-financial misconduct can amount to a breach of our [FCA] conduct rules’.

In this practical, scenario-based, in-person training session, delivered by regulatory and employment lawyers who have dealt with non-financial misconduct issues firsthand, you’ll learn how to navigate the challenges of investigating NFM in your firm, understand when NFM might breach the conduct rules and assess the impact of NFM on the fit and proper assessment.

Immediately after the training, you will receive a zip folder of key resources and checklists referred to in the training session which you can use to help you enhance your policies, processes, and practices around NFM.

Attending this session and leveraging the resources will give you the knowledge and confidence to:

1. Ready your firm for anticipated new rules on NFM.
2. Align your firm’s whistle-blowing policy, reporting process and procedure to the regulators expectations
3. Recognise and escalate NFM incidents appropriately
4. Manage NFM incidents
5. Ensure regular communications between the HR and compliance teams to deal with and manage NFM incidents
6. Assess what may amount to ‘serious’ misconduct
7. Accurately record NFM incidents
8. Understand when NFM should be reported to the FCA

What you’ll cover in the session:

– Overview of Non-Financial Misconduct (NFM)
– FCA’s Stance on Non-Financial Misconduct
– Regulatory Framework and Guidelines
– Compliance Obligations for PIMFA member firms
– Key Responsibilities of Senior Managers
– Reporting and Documentation Requirements
– Implementing Effective Policies and Procedures
– Approaches to creating a Positive Organisational Culture
– Establishing Clear Conduct Standards
– Training and Awareness Programs
– Monitoring/measuring culture
– Whistleblowing, complaints handling and investigations
– Discipline for NFM
– Regulatory references
– Reporting to the FCA
– Interactive Case Studies of Non-Financial Misconduct in Financial Services
– Lessons Learned from Past Incidents
– Best Practices for Mitigating Non-Financial Misconduct
– Successful Strategies from Leading Firms
– Continuous Improvement and Learning
– Monitoring and assessments
– Q&A Session

Who Should Attend:

• Compliance and Conduct leaders seeking guidance on how to:
– Deal with allegations of non-financial misconduct
– Recognise whether NFM is an isolated incidence or an indicator of a wider culture issue

• HR leaders who want to ready their firm’s response for new FCA rules and guidance, including the impact NFM could have on remuneration and how NFM should be dealt with in a regulatory reference.

• In-house counsel who seek assurance of when and how to respond to allegations of non-financial misconduct.

This training course will take place IN PERSON at the DAC Beachcroft London Office located at 25 Walbrook, London EC4N 8AF

Bring a colleague along for free!

Use VOUCHER CODE BG3N8AKH at checkout to claim this buy-one-get-one-free offer!

This voucher can only be used when purchasing 2 full price tickets

PIMFA Webinar: CASS Skilled Person Review: How to Respond, Tackle and Avoid Action

The FCA’s Section 166, “Skilled Person Review,” is one of the regulator’s go-to tools they’re not afraid to use, when assessing your firm’s compliance with the CASS rules. No need to be concerned? Think again, as s166 reviews continuing to rise across the sector, firms should be in no doubt that the FCA is prepared to appoint an independent third party to conduct a ‘drains up’ review of your approach to CASS.

Even for the largest firms, a S166 review is intrusive, expensive, time-consuming, and incredibly resource-intensive as your firm attempts to demonstrate effective risk management and adherence to regulatory standards.

In this FREE 60-minute webinar, we’ve assembled a panel of FCA-appointed skilled persons alongside specialists in CASS compliance to answer your most pressing concerns about the s166 review process. No question is off limits as we tackle:

1. ‘Help, we’ve got a s166 notice!’
2. What to do if The FCA commissions a s166 review
3. How to get the most from a CASS s166 review
4. The costs of a skilled person review
5. The foolishness or wisdom of challenging the findings of a s166 review
6. The most effective strategies to avoid a skilled person review

PIMFA Webinar: CASS: The calm before the s166 storm

Before the FCA initiates a Section 166 review of your firm’s approach to CASS, the regulator typically takes several preliminary steps to assess your firm’s compliance and risk profile. Yet for many firm’s the regulators actions before a s166 is triggered, remain a mystery.

In this FREE 60-minute webinar, we unpick the crucial steps leading up to a Section 166 notice, demystifying the key processes and interactions the FCA undertakes before a review of a firm’s approach to CASS is initiated.
To avoid a painful and costly review of your CASS governance and oversight arrangements, our panel our experts discuss:

1. How the FCA is conducting routine supervisory activities on your approach to CASS in 2024.

2. How the regulator uses data from regulatory submissions and reports to assess and manage your firm’s CASS risks.

3. How a firm’s CASS compliance breaches informs the FCA’s decision-making process.

4. How to identify and assess issues that could lead to a s166 review of your firm’s CASS culture, governance, and organisational arrangements.

5. How to proactively use market intelligence, thematic reviews, and inspections to eliminate weaknesses in your CASS environment.

Budget changes will be hard felt by retail investors and the Government must now prioritise stability to build investor confidence

Posted on October 30, 2024April 30, 2025 by Sheena Gillett

30th October 2024

Budget changes will be hard felt by retail investors and the Government must now prioritise stability to build investor confidence

Headline changes to the rate of capital gains tax and inheritance tax announced in today’s Budget risk stymying future investment and introducing unwanted confusion for personal financial planning, PIMFA, the trade association for wealth management, investment services and the financial advice and planning industry warned.

High amongst the concerns is the decision to increase the rate of Capital Gains Tax to 18% and 24%, respectively, which could have a detrimental impact on consumer willingness to save and invest in the UK. This is particularly so given the fact that substantial increases in the headline rate have not been accompanied by a change in the threshold, which has been eroded substantially over the previous 5 years.

Whilst PIMFA supports the Government’s decision to freeze the inheritance tax threshold until 2030, it notes that substantive changes to reliefs associated with this regime risk introducing additional complexity into the financial planning process as well as the potential to diminish the value of previous estate planning, specifically related to pensions.

Accepting that difficult decisions have had to be made, PIMFA has strongly urged the Government to ensure that these substantive changes are not likely to be further changed over the course of this Parliament. Whilst the changes are unwelcome, the Government needs to ensure it now prioritises stability in the taxation framework and guard against making tweaks in the future in pursuit of making up fiscal shortfalls.

Commenting on today’s Budget, Simon Harrington, Head of Public Affairs at PIMFA said: “Savers and investors will draw little consolation from the fact that measures announced in the Budget by the Chancellor today could have been worse.”

“We accept that the Chancellor has sought not to place a burden on working people (however this government chooses to define them), but in targeting Capital Gains Tax (CGT) in particular, this government risks stymying the very investment it seeks to stimulate economic growth. The government’s desire to utilise capital from pension funds to aid this has been much discussed, and we urge them not to needlessly erect further barriers for retail investors who can also play a crucial role in delivering growth.”

“Whilst we welcome the government’s extension of the inheritance tax threshold, the decision to change reliefs associated with it as well as the decision to bring pensions in scope will impact the effectiveness of people’s financial plans across the country and – in some cases, it may introduce doubts about the value of previous estate planning advice – specifically advice related to pensions. The value of financial advice is the certainty of outcome it can provide, and the confidence consumers can draw from that as a result. Constant tinkering with this regime diminishes the perceived value of holistic financial planning in particular.”

‘Going forward, the Government should prioritise stability over future changes. We have been very clear that the government should adopt a taxation roadmap for personal taxation similar to the approach outlined for businesses in this Budget. Doing so would be enormously helpful and reassure savers and investors who need the confidence to know how their wealth will be treated both in accumulation and decumulation.”

<ENDS>

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 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:

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk,
+44 (0)20 7011 9869 / +44 (0)7979 493225.

Protecting the workforce: preparing for the new duty on employers to prevent sexual harassment

Posted on October 29, 2024May 16, 2025 by Laura Skaanild

As part of a continued concerted effort to protect the rights of individuals and improve culture in the workplace, a new Worker Protection Act, effective 26 October 2024, requires employers to “take reasonable steps” to prevent sexual harassment in the workplace.

Sexual harassment, as defined by the Equality Act 2010, is when a person engages in unwanted behaviour of a sexual nature, whether verbal, non-verbal or physical, that creates an intimidating, hostile, degrading, humiliating or offensive working environment. It can encompass a range of actions, including making sexual remarks or comments, telling sexually offensive jokes, and displaying or sharing content of a sexual nature.

Under the new duty, employers (regardless of their size, sector, or circumstance) are required to take a proactive approach to tackling sexual harassment, the intention being to shift the emphasis from redress to prevention. The duty is accompanied by Equality and Human Rights Commission (EHRC) technical guidance which outlines various examples and case studies to support employers to meet the additional new requirements.

Key points to note include:

The duty is anticipatory – employers are required to undertake risk assessments to anticipate and identify scenarios in which their employees may be subject to sexual harassment, and to take preventative action.
The duty extends to sexual harassment by third parties – including visitors, clients, or customers. The legislation does not make employers liable for third-party harassment itself, however.
The duty applies to ‘the course of employment’ – this could mean time working offsite, in training, and external meetings. It may include work-related time, such as work social events. Accordingly, an all-encompassing and broad approach is needed to meet the requirements of the new duty.

Whether action is deemed ‘reasonable’ will depend on the specific circumstances of the employer. Likely factors of relevance the employer’s size, and its practices and procedures (e.g. grievance and reporting procedures) for preventing and dealing with sexual harassment.

Enforcement measures

Employees will not be able to bring claims directly for an employer’s breach of the duty. However, where there is a successful claim for sexual harassment, the Employment Tribunal will then consider applying an uplift of 25% to any compensation awarded if it also considers the employer to have breached the duty. Even without the uplift, the compensation payable to employees after suffering sexual harassment can be substantial. As such, the financial impact of the new duty could be material.

From 26 October 2024, the EHRC will also have power to take enforcement against employers where they are found to have breached the duty.

The regulatory approach to such issues is also evolving. The Financial Conduct Authority (FCA) considers bullying, harassment (including sexual harassment) and discrimination to be forms of non-financial misconduct, increasingly an area of focus in recent years. As such, the regulator is expected to keep a close eye on firms’ approach to the new duty.

Insurance considerations

As with any key changes to employment legislation, employment practices liability (EPL) insurers will have a keen interest in understanding firms’ approach.

The new act does not place additional personal duties on directors. However, the potential for regulatory scrutiny and also an increase in the potential for boards to face allegations that they didn’t have appropriate systems and controls in place to prevent sexual harassment, means that Directors’ and Officers’ liability (D&O) insurers can be expected to focus on the subject when underwriting D&O cover.

Both EPL and D&O insurers will be keen to see firms take steps to comply with the duty and mitigate risk. Specifically, these may include:

Reviewing existing policies and training procedures and enhancing where appropriate g. equal opportunities policy, anti-harassment policy, and disciplinary policies. Assess the training provided in relation to relevant rules (e.g. misconduct) and the methods of delivering and communicating such training.
Identifying potential sources of risk – this may include reviewing past claims or grievances, or (if conducted) exit interviews or employee surveys relating to workplace culture. Compare current methods of recording and resolving complaints against relevant policies to identify potential gaps. Consider scenarios in which sexual harassment is likely to take place and identify steps to minimise/ eradicate these.
Conducting regular training – focus on ensuring that staff understand what sexual harassment is, how to identify it, the potential consequences, and how to respond should they experience or be informed of alleged sexual harassment.
Establishing reporting channels – put in place clear guidelines for whistleblowing for issues around sexual harassment, bearing in mind the need to ensure that those reporting issues are protected, respecting the need for confidentiality and data protection.
Implementing regular reviews – to ensure that policies are kept up to date and reassessed at regular intervals, and in response to relevant incidents and/or failings.
Establishing repercussions for those found guilty – and maintain the capability for allegations to be effectively and independently investigated.
Seeking an external review – g. from an employment law firm or similar professional consultant, and implement any advice provided.

As for wider insurance considerations, it is important to consider the extent to which your cover allows for public relations (PR) costs to support through any potential reputational issue (or can be adapted to provide for such advice). As the first cases are pursued in relation to the new duty, the press coverage may be extensive. Any impacted firms will want to carefully manage their response.

For more information, please contact laura.skaanild@lockton.com

Laura Skaanild

PIMFA welcomes 600 professionals at launch of customer vulnerability guide

Posted on October 25, 2024April 30, 2025 by Sheena Gillett

Why is the Wealth Management Industry Building Blockbusters When the Consumer Needs Netflix?

Posted on October 24, 2024May 16, 2025 by Tom Whittle

In 1989, Blockbuster video arrived in the UK and transformed Saturday nights for many families. As a child, visiting Blockbuster to pick out a video felt like a big event. Yet, several years later, the business collapsed, leaving behind empty, graffiti-covered buildings. The only surviving neighbouring businesses being the weatherproof off-licences with the teenagers of the era (myself included) hanging around outside asking adults to buy them MD2020, Merrydown cider and Hooch.

The collapse was due to a fundamental shift in consumer behaviour, much like what we’re seeing today as an estimated £5.5 trillion passes down through the generations of UK investors¹.

The digital generation changed everything. Consumers, now largely online, sought the convenience of streaming services like Netflix over traditional video rentals. Ironically, Blockbuster had the opportunity to buy Netflix for just $50 million but passed on it. Blockbuster didn’t adapt, and now it’s extinct. This serves as a stark warning to the wealth management industry: adapt or face a similar fate.

This is why the FCA’s recent Consolidator Review is so important. Although much has changed since their last review on the financial advice market eight years ago², it’s essential that the FCA scrutinises the market in a way that benefits the 92% of UK investors who are locked out of traditional financial advice. This is something that Octopus Money seek to address, and their CEO Ruth Hancock speaks with passion on this topic³.

These investors need low-cost, accessible services—something akin to Netflix for wealth management. Economies of scale could make financial advice affordable, preventing clients from turning to Finfluencers or risky cryptocurrency apps. If the FCA gets it wrong, we risk creating another Blockbuster: advice firms may shut down, leaving nothing but shuttered premises and underserved investors.

Private Equity Firms with “Buy & Build” consolidation strategies fall into two categories. The good actors have dedicated value creation teams that enhance businesses to increase their exit multipliers. The bad actors, however, hoover up balance sheets, acquiring run-off books from retiring IFAs with little intention of improving services or creating long-term value. This approach can lead to fragmented operations, poor customer outcomes, and even a threat to independent advice.

One prominent area where these two differing approaches can be witnessed is in relation to the Central Investment Proposition (CIP) and house Model Portfolios. As firms acquire more businesses, they often end up with multiple models and platforms, leading to friction between operations and distribution. The good actors streamline on-platform operations using automation technologies like Tikker, or by hiring grassroots talent that can move laterally within the business. In contrast, bad actors push customers into house models and force platform migrations solely to reduce costs to the business, all while undermining the very principle of Independent Financial Advice (IFA).

One example of good practice comes from Soderberg Partners, who do not include their own funds in their model portfolios, citing that this is a way to uphold the integrity of their investment advice and to mitigate any potential conflicts of interest that might arise. Other examples include managers using inhouse ‘building block’ funds within model portfolio CIPs to utilise volume discounts, which are then passed on to clients, promoting good outcomes under Consumer Duty.

While consolidation offers some advantages, such as bringing consumers closer to fund managers and unlocking opportunities like proxy voting and access to preferential share classes, it also introduces significant risks. One key issue is the growing complexity of Know Your Customer (KYC) requirements as consolidators acquire multiple entities. Failing to manage customer data effectively creates money laundering risks and makes it difficult to support vulnerable clients. With many investors in retirement, clear communication is crucial, especially as clients receive communications from unfamiliar brands. Even the most cyber-aware investors could fall prey to phishing attacks when they start receiving emails from multiple firms after consolidations.

The industry also struggles with integration. Mergers and acquisitions (M&A) add layers of complexity to customer and entity reference data, making it harder to deliver seamless services. Poor integration leads to inefficiencies, and firms that don’t prioritize this will struggle to provide the level of service their clients expect. Let’s hope the FCA brings these integration challenges into sharper focus, encouraging firms to improve their operations.

Fortunately, we know there are many good actors too. We’ve had the pleasure of working with several consolidators who are committed to streamlining their operations and delivering a more affordable, holistic service to their clients. The hope now is that the FCA can spot the Rotten Tomatoes – the ones destined to build the next Blockbuster, deriving revenues from opaque fee structures – and don’t stifle the growth of the much-needed Netflixes of the wealth management world.

Tom Whittle – Founder, Tikker

tom.whittle@tikker.co.uk

¹Kings Court Trust: Passing on the Pounds: the rise of the UK’s inheritance economy

²FCA publishes evaluation of its work on the financial advice market | FCA

³Octopus Money CEO Ruth Handcock warns advice gap to worsen (professionaladviser.com)

Spotlight on Close Brothers, a UK’s leading Asset Management firm

Interested in a career in finance and wealth management but don’t know where to start? Unsure if it’s for you but want to know more? Then this event is for YOU.

Join us for an enlightening and inspiring insight into the world of asset management with one the UK’s leading wealth managers with £19.3bn in assets under management as of 31 July 2024.

Close Brothers Asset Management are long-term, multi-asset class investors with 16 offices situated in cities across the UK helping clients choose the right financial planning and investment management services to suit their lifestyle now and into the future.

This unique event offers you the opportunity to meet and network with industry professionals from Close Brothers AM and like-minded young people keen to explore careers in the finance sector.

What is spotlight?

Spotlight is an immersive experience designed to shed light on the dynamic world of Wealth Management and Financial Advice. It’s your chance to discover the inner workings of this thriving industry and the opportunities within it, from Graduate Scheme, to Internship, Apprenticeships and opportunities across different departments like Legal, HR, Marketing, Accounting, Technology and more. There are so many different opportunities, and the industry is looking for fresh new talent just like you. You don’t have to be good at maths, it isn’t boring or stuffy and there are so many ways to advance and do good.

Find out for yourself and hear from, and network with, professionals who will be sharing their stories and insight about their own career journey, how they got into the industry, and top tips to help you kickstart your career.

Why should you attend?

Expert, Insider Insights:

Gain invaluable insights from seasoned professionals who have been where you are and can share how they navigated their own career journey to become successful. Learn about market trends, career paths, and the skills needed to succeed in this dynamic field.

Learn, Develop & Grow:

Whether you’re a student exploring future career options or a graduate seeking to kickstart your career, Spotlight equips you with the knowledge and resources to thrive in the finance industry. Discover internship opportunities, graduate programs, and mentorship initiatives tailored to your ambitions.

Build your Personal Brand:

Learn from professionals on how to network and build your personal brand. Create meaningful connections with industry experts, recruiters, and like-minded peers. Expand your professional network and open doors to exciting career prospects.

Who can attend?

This event is for people who are interested in a career in finance, asset and wealth management. This event is FREE and to attend you must be 18 and complete the application form.

How to Participate?

Don’t miss out on this opportunity to learn about working in finance. Please note that spaces are limited, and you should only apply if you can attend.

To apply please click here

Digital Transformation in Wealth Management: A Path to Efficiency and Compliance

Posted on October 22, 2024May 16, 2025 by Alexander Blayney

Beyond the buzzwords and industry jargon, digital transformation is proving to be a long-term financial win for firms in this sector. The good news is that with the latest generation of SaaS solutions, this digital transformation does not need 12 to 18 months to be implemented or to be hugely capital-intensive.

A Constantly Evolving Digital Landscape

The wealth management sector is experiencing ongoing digital shifts, which firms must navigate to stay competitive. Here are some key factors shaping the industry today:

Changing Client Expectations: Clients now expect seamless, user-friendly digital experiences in wealth management, including real-time portfolio access, digital onboarding, and personalised insights. According to the 2023 EY Global Wealth Research Report, 40% of clients find wealth management increasingly complex, highlighting the need for digital tools that simplify financial management and offer tailored insights.
Data-Driven Insights: Advanced technology allows wealth managers to gather and analyse vast amounts of client data. This data can be leveraged to deliver personalised investment strategies and bespoke services, enhancing client satisfaction and engagement.
Cybersecurity Challenges: As financial transactions move increasingly online, robust cybersecurity measures are essential. Wealth management firms must ensure that they always protect their clients’ sensitive data, adhering to stringent regulatory standards and mitigating the risk of cyber-attacks.

Streamlined Operations and Efficiency Gains

Digital transformation streamlines operations by automating tasks like data entry, transaction processing, and client onboarding, reducing manual effort and cutting costs. Technologies such as Robotic Process Automation (RPA) and Artificial Intelligence (AI) complete legacy manual tasks in minutes, boosting efficiency and accuracy while lowering operational expenses.

Enhanced Client Engagement and Retention

Digital solutions allow wealth management firms to engage clients cost-effectively and personally. By using data analytics and AI, firms can customise offerings and communications, improving retention and lowering acquisition costs. Satisfied clients receiving personalised advice are more likely to stay long-term, boosting lifetime value and profitability. According to the EY and PIMFA WealthTech Report, 53% of clients are willing to pay more for personalised services, while 32% of millennials consider digital services a key factor in choosing a wealth manager, second only to performance.

Improved Risk Management and Fraud Prevention

Digital tools like predictive analytics, machine learning, and real-time identity verification help wealth management firms assess and mitigate risks, reducing fraud, money laundering, and compliance violations. Plug-and-play RegTech solutions offer end-to-end risk management, performing the tasks of traditional teams while cutting costs.

Cost Reduction in Physical Infrastructure

Traditional wealth management models often rely on physical offices and in-person consultations, which come with high overhead costs. With the adoption of digital channels, firms can reduce their physical footprint while maintaining, or even improving, the quality of service. This shift aligns with evolving client preferences for remote and on-demand access to their financial information and wealth management services.

Competitive Advantage and Market Expansion

To remain competitive in the wealth management space, innovation and agility are key. Digital transformation allows firms to respond quickly to market changes and client demands, providing a competitive edge and opening opportunities for market expansion. The ability to offer a full suite of services digitally—whether clients are at home, at work, or on the go—meets the demand for convenience and flexibility, making it easier to attract and retain clients.

Regulatory Compliance and Cost Reduction

Compliance with financial regulations is a resource-intensive process for wealth management firms. From AML requirements to the Financial Conduct Authority’s (FCA) Consumer Duty obligations, staying compliant is critical yet costly. By implementing digital solutions that automate compliance processes, firms can reduce the time and effort required to meet regulatory requirements.

Data-Driven Decision Making

Digital transformation enables real-time, data-driven decisions in wealth management. Access to extensive client data helps firms optimise investment strategies, improve client outcomes, and boost profitability while reducing inefficiencies and risks.

If you would like to discuss how digital identity verification can benefit your wealth management practice or learn more, please feel free to email me: alex@id-pal.com or connect with me on LinkedIn here.

Alexander Blayney, Global Partnerships & Enterprise Sales, Id-Pal

PIMFA celebrates winners of its 2024 Diversity & Inclusion Awards

Posted on October 11, 2024April 30, 2025 by Emily Gilchrist

11 October 2024

PIMFA celebrates winners of its 2024 Diversity & Inclusion Awards

PIMFA, the trade association for wealth management, investment services and the financial advice and planning industry welcomed over 300 professionals to celebrate the inspiring stories and initiatives from across the industry at the annual Diversity & Inclusion (D&I) Awards.

The 2024 PIMFA D&I awards, held at the InterContinental Hotel Park Lane in central London last night (10 October 2024), received a huge number of superb entries highlighting D&I initiatives that demonstrated excellence and good practice.

Originally created in 2021, the PIMFA awards endeavour to provide inspiration and shine a light on the excellent, and often untold, stories that exist across organisations and among individuals in the wealth management and advice industry, and to use these examples to inspire others to continue to strive and innovate to ensure the profession better reflects the clients it serves and can create a diverse and inclusive organisation and industry.

The winners in each category were chosen by an independent group of industry peers alongside experts in diversity and inclusion from charities that PIMFA partner with which included Peter Moores, Chief Executive of Raymond James UK; Bev Shah, Chief Executive & Founder, City Hive; Sean Taylor, Director, Arbuthnot Latham, Richard Wilson, Chief Executive Officer at abrdn Personal Wealth & interactive investor among others.

This year’s winners in each awards category were:

Best DE&I Initiative Award (51 – 350 Employees)

WINNER: Dynamic Planner

Risk Management: Tactics for Digital Assets

In April 2023, FCA’s Sarah Pritchard highlighted at City Week that while cryptoassets are growing in popularity, many consumers don’t fully understand the risks involved. This lack of understanding poses significant risks not only to consumers but also to firms. With the introduction of consumer duty, firms face substantial consequences if they fail to meet regulatory standards.

Join our live event to discover key strategies for managing these risks effectively.
In this live webinar we discuss the following aspects:
• Key risk considerations
• Global regulatory themes
• Impacts for firms
• Crucial steps for success
• Ruleguard’s approach to risk management

To learn more about Ruleguard’s risk management solutions visit https://www.ruleguard.com/function/enterprise-risk-management-software.

Overview – AI models in the insurance sector

Posted on October 8, 2024May 16, 2025 by Tim Ryan

Speaking at the StepChange Connected conference in Leeds, Mr Rathi spoke about the potential of AI to hyper-personalise insurance offerings. Although he recognised that this development may be beneficial for businesses and some customers, it could also result in certain customers becoming uninsurable or increasing discrimination due to algorithmic bias.

These developments highlight the need for businesses to consider regulatory expectations regarding the use of AI. While the AI legal and regulatory landscape still remains relatively unchartered in the UK, Rathi’s comments could signal a cautious approach from regulators. This mirrors the EU’s AI Act, which illustrates a regulation-heavy stance towards the integration of AI. In the EU market, where the use of AI systems is classified as being high risk, such as automated risk assessment and pricing of life and health insurance and assessment of credit rating, more stringent regulatory obligations apply.

Insurance providers and other businesses operating in regulated sectors must navigate a balance between innovation and consumer protection. While the FCA recognises that AI can be a useful tool in creating tailored products, ultimately businesses must be transparent and fair. Again, this aligns with the principles highlighted in the EU AI Act of accountability and preventing algorithmic discrimination. There is, amongst other things, a risk of AI systems using historical data to perpetuate biases and accentuate unfairness; automated decisions using AI without an adequate degree of transparency could not only alienate customers, but also spark regulatory and reputational risks.

The FCA has advocated for the need for collaboration within the financial services industry, to ensure that consumers are protected while nurturing innovation. There is a need to consider not only compliance with current and potential legal and regulatory responsibilities, but also the ethical implications of using AI in a way that will impact consumers. As the use of AI technology evolves rapidly, innovators are likely to be ahead of regulators. This puts greater onus on businesses to use AI systems in a responsible way. While use of the technology may be permitted, financial services providers should consider whether the implications are unfair for customers.

Many insurers operate in the EU market, of course, and will expect to adopt similar approaches in the UK. The EU’s AI Act explicitly mentions certain uses of AI systems within the insurance sector which are considered high risk. Legislation in the UK does not currently provide this level of detail, however Mr Rathi’s comments suggest the FCA shares concerns that certain uses of AI could cause unfairness and harm to consumers. It further indicates that, particularly in high risk circumstances, there is an expectation that the use of AI technology will be subject to human review. It is crucial that insurance providers and other financial services providers are legally compliant and also ethically aligned with consumer protection principles and that these are not jeopardised by the use to automated systems. We can draw parallels from the EU’s robust approach, while recognising that the UK market is not itself, at least for the time being, subject to equivalent legislative oversight.

The Prudential Regulatory Authority (PRA) and the Bank of England published a joint response earlier this year to the government’s white paper on AI. Their response aligns with Mr Rathi’s comments and welcomes the government’s proposed principles-led approach to regulating AI. They noted that this complements the existing framework for regulators. The PRA also stated that it will undertake further analysis as to AI’s potential impact on financial stability. In addition to the principles of transparency, fairness and accountability, the FCA and PRA have an obligation to promote the international competitiveness of the UK economy. Regulators, and the businesses that operate under them, will need to carefully consider how these competing objectives are balanced.

Tim Ryan – Partner, DAC Beachcroft

Hannah Clements – Solicitor, DAC Beachcroft

PIMFA Webinar: What Senior Managers Need To Know

FCA fines against firms and individuals totalling £87 million so far in 2024 indicate a serious knowledge gap among senior managers in financial services firms. They are often unprepared and overwhelmed to interpret and respond appropriately to the volume and complexity of regulatory change for which they are responsible.

In this FREE 60-minute webinar, experts from CCL Academy unpack what you, as a newly appointed or current senior manager, need to know to make better and more informed decisions to meet the rising expectations of staff, your board, and the regulator.

Key discussion points include:

1. What recent FCA fines tell us what senior managers need to learn in 2025.

2. The three most common knowledge gaps found among senior managers which expose their firms to severe risks and uncertainties.

3. How smart leaders build the breadth and depth of their regulatory knowledge to make better holistic decisions for their firm.

How to Leverage Real-Time Notifications in a Hybrid Wealth Business

Posted on October 3, 2024May 16, 2025 by Fredrik Davéus

In today’s blog, we examine the experience of one of our clients, one of the largest insurers in Sweden, Skandia, in leveraging advanced analytics to improve communication with their customers at scale. Rather than letting their customers drift away after initial execution, Skandia uses proactive notifications to strengthen relationships, build trust, and support clients in reaching their financial milestones.

The Importance of Continuous Client Engagement

Once they’ve set their financial plans and goals, customers need reassurance that they’re on the right track. This reassurance comes from regular interaction and meaningful updates on their portfolio’s performance. While regular communication in traditional wealth businesses is usually facilitated by a team of experienced financial advisors, a more modern, omnichannel approach relies on both digital and physical experiences.

The financial analytics powering Skandia’s digital financial planning journeys have been extended to evaluate the customers’ financial situations on an ongoing basis, providing reliable and timely support for the life insurer’s clients.

By delivering timely updates in a channel of the customers’ choice, Skandia provides clients with a sense of control over their financial futures, showing them how their plans may evolve due to, for instance, market fluctuations. Consider Skandia’s client planning for retirement. They benefit from regular updates about their pension savings progress, adjusting for market changes, and any new contributions. The analytics powering Skandia’s experiences enable clients to envision how their expected pension evolves over time in their customer portal. It transforms their financial journey from something abstract into a tangible, trackable, and engaging experience.

Examples: Keeping up with Market Performance, Customer Goals and Product Universe Updates

As new investment products emerge, the fund composition changes or the investor takes the initiative to amend their portfolio, your client’s savings may drift from their intended strategy. Without proper guidance, clients may miss out on opportunities for optimisation or, worse, veer off course entirely.

Wealth managers can provide continuous value by sending personalised notifications that keep clients on track. Skandia uses the financial simulation engine, KidbrookeONE, to identify when a client’s portfolio deviates from the recommended model and offers specific suggestions for adjustments. Then, the insurer notifies the client when their portfolio no longer aligns with the ideal strategy. Besides, Skandia goes a step further by offering suggestions for funds that better match the client’s financial objectives in the client portal, helping the customers make adjustments that are easy to implement and beneficial in the long run.

Another key aspect to track is how the risk of the client’s portfolio changes over time. Risk tolerance varies from client to client, but one constant remains: clients need to know when their portfolio’s risk level is straying from their preferences. When a portfolio drifts outside of the client’s desired risk level, Skandia’s timely alerts can prompt necessary adjustments. For instance, clients are automatically informed if their portfolio is taking on too much risk, with actionable recommendations provided to bring it back in line – all powered to be executed at scale by financial analytics technology.

Importantly, the notifications can also be triggered by the ongoing evaluation of Skandia’s product universe making it easy to notify clients about high-performing funds and those no longer available in the product universe within the client’s portfolio. For example, when a fund is removed from the product universe, Skandia leverages financial analytics to provide clear, actionable replacement suggestions.

Prioritising Consistency Across Channels

Here we also note that increasing the volume of follow-up communication highlights the importance of consistency across channels. Whether clients interact with their wealth manager via digital or physical channels, the information they receive, and the provided information, should be consistent and aligned to avoid confusion, which can undermine the trust wealth managers work so hard to build. KidbrookeONE achieves omnichannel consistency, ensuring that portfolio simulations, recommendations, notifications and advisor meetings provide the same quality of actionable information across the business. This reinforces the wealth manager’s credibility, allowing clients to feel confident in their financial strategies no matter where or how they engage.

Driving Long-Term Value through Proactive Notifications

Building an effective communication system post-purchase is no longer an optional strategy—it’s a critical component of a modern omnichannel wealth business. By offering clients personalised notifications, risk management alerts, portfolio recommendations, and updates on fund performance, Skandia builds stronger, more meaningful relationships with their clients. In the end, proactive engagement is about more than client retention—it’s about providing ongoing value that builds trust, enhances the client experience, and drives long-term success for both the client and the wealth manager.

Fredrik Daveus, CEO, Kidbrooke

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Morningstar Adviser Forum, London 17 October

Discover Morningstar’s latest research tailored for UK advisers. Perfect for those who’ve outsourced investments or want to enhance their practice.

Featuring:

• Topical Market Commentary
• Investment Management Insights
• Manager Research
• Behavioural Finance Perspectives

Elevate your advisory practice with Morningstar’s expertise.

Contact: Sarah Rouse: eventsmanager@morningstar.com

To book your place and for further information click here.

Avoiding Stress-related Errors

Posted on September 24, 2024May 16, 2025 by Lucie Gosling-Myers

Long hours, demanding clients, and high-stakes cases take a toll on mental wellbeing. However, the consequences of ignoring this issue go far beyond employee health. Stress in the workplace is a major source of errors and omissions, leading to increased risk of professional indemnity claims and financial loss.

By taking steps to manage stress and prioritise employee wellbeing, wealth management firms can not only create a happier and healthier workforce but also improve their colleague retention rates, risk profile and, potentially, their bottom line.

High levels of stress in the workplace

Work-related stress, depression or anxiety is defined as a harmful reaction people have to undue pressures and demands placed on them at work.

Unfortunately, stress in the workplace isn’t uncommon. According to Health and Safety Executive (HSE) data, an

Employees in the professional services sector are particularly prone to stress. Working environments can be high-pressure, with long hours and large workloads. Lack of recognition, inadequate support, discrimination, and even the commute to work are all sources of potential stress.

The benefits of a mentally healthy workforce

By prioritising employee mental health, wealth management firms can create a safer and more productive work environment. This translates to several benefits:

Reduced risk of claims: addressing stress can significantly reduce the risk of errors, missed red flags, and communication breakdowns, leading to fewer professional indemnity insurance (PII) claims and potentially lower insurance premiums.
Improved client service: a happy and healthy workforce is a productive one. Mentally healthy employees are better able to focus, manage complex tasks effectively, and provide superior legal representation to clients.
Enhanced employee retention: high turnover rates are expensive for firms. Investing in mental health can create a more positive work environment, leading to increased employee satisfaction and retention. Having a stable workforce can also help to eliminate continuity issues and minimise project disruption.

By contrast, failure to manage work-related stress can be detrimental for employees’ wellbeing and performance. For wealth management firms, this could lead to claims or regulatory issues.

Managing stress to reduce risks

Given these consequences, as part of the insurance renewal process, insurers will be keen to understand to how firms are managing workplace stress and prioritising employees’ wellbeing.

Key strategies to manage workplace stress include:

Establish a clear policy on stress, and physical and mental health
Give employees support in their day-to-day work
Ensure workloads are manageable
Provide a safe environment for people to raise concerns, and address them promptly
Train managers to recognise the signs and symptoms of stress, and to manage conflict within teams
Encourage employees to take regular breaks and make use of their holiday

A comprehensive approach to wellbeing

Not all workplace stress is work-related. To ensure employees are adequately supported to manage stress, firms may consider investing in comprehensive employee benefit packages. These typically provide mental health support via an Employee Assistance Programme (EAP), often at no cost to employees.

An EAP can be a vital resource for employees to use if feeling overwhelmed and stressed. Access to counselling services can also help and offers support across a broad range of topics.

Other benefits that could help manage stress include:

Salary exchange – in return for cycle-to-work schemes, season ticket loans, and increased employer pension contributions
Flexible working – reviewing working patterns may save employees money and valuable time, helping to relieve stress
Buy/sell annual leave – this can give employees more regular breaks to reduce burnout, or additional salary
Firms should ensure all benefits are accessible and visible to employees. This will ensure help can reach those in need at an early stage and prompt faster recovery.

For more information, please contact:

Lucie Gosling-Myers, Senior Client Development Manager, Lockton

E: lucie.gosling-myers@lockton.com

Laura Skaanild, Head of Global Financial Institutions, Lockton

E: laura.skaanild@lockton.com

The PIMFA Customer Vulnerability Learning Programme 2025

🎟️ This Event Has Officially Sold Out!

The FCA’s long-awaited published review of Customers in Vulnerable Circumstances (March 2025) leaves no room for doubt, requiring an immediate response from PIMFA wealth firms seeking to continually meet the regulator’s expectations.

And with the FCA not afraid to use the “pointy end of our toolkit” (Alison Walters, FCA’s Director of Consumer Finance, speech 11th March), band-aid or bolt-on solutions for identifying vulnerable customers, outcomes monitoring, data, staff training, and product and service design by firms won’t cut it; all must be improved to ensure that vulnerable customers of wealth managers receive the support they need.

A unique learning offering

PIMFA’s Customer Vulnerability Learning Programme, led by the award-winning vulnerability training team at The Money Advice Trust, is the only Vulnerability training programme that integrates PIMFA’s own Understanding Customer Vulnerability guidance (Nov. 2024) with the FCA’s Good and Poor Practice (March 2025) to offer members our most robust and comprehensive vulnerability training ever offered to wealth managers.

A full-on, immersive, root-and-branch training experience, PIMFA’s Customer Vulnerability Learning Programme provides firms with ‘know how’ needed to transform their processes, systems, and people to deliver better outcomes for vulnerable customers.

PIMFA’s Vulnerability Learning Programme will support your firm:

Accelerate the adoption of new FCA expectations on vulnerability in your firm
Design best-in-class experiences for Customers in vulnerable circumstances
Build and lead a more effective strategy on vulnerability
Develop a shared vision of success around your approach to vulnerability
Anticipate, evaluate, and proactively respond to FCA expectations
Build a customer centric culture into the fabric of your firm and foster a new sense of purpose

Download the brochure to find out how our new Customer Vulnerability Learning Programme can support you in developing a firm-wide strategy for customer vulnerability.

If you are a PIMFA Member, please ensure you are logged in to see member tickets.

Advance your skills, Bring a colleague along for FREE!

Please email learning@pimfa.co.uk if you would like to take advantage of this amazing offer!

The Evolution of Identity Verification in Wealth Management: From Paper to Digital

Posted on September 16, 2024May 16, 2025 by Alexander Blayney

In the wealth management industry, this evolution has been largely driven by the need for enhanced security, greater convenience, and increased regulatory compliance. As wealth management firms strive to balance the user experience for their clients with Anti-Money laundering (AML) legislation, the importance of streamlined and secure identity verification processes has never been more critical.

According to a recent EY and PIMFA Wealth Tech Report, clients in the wealth management sector are increasingly demanding a straightforward onboarding experience. They seek processes that not only minimise time but remove unnecessary complexity. This demand extends to a desire for less paperwork and shorter onboarding times, enabling clients to begin their wealth management journey with minimal delays.

Additionally, the 2023 EY Global Wealth Research Report highlights that nearly 40% of clients believe managing their wealth has become more complicated in recent years, compared to just 14% who feel it has become simpler. This underscores the need for wealth managers to adopt digital solutions that can simplify client interactions and enhance the overall experience for them.

From Paper-Based Verification to Digital Solutions

Traditionally, identity verification in wealth management relied heavily on physical documents. Clients were required to provide identification cards, passports, driver’s licenses, and other tangible proofs of identity in physical or photocopied format. These documents served as the primary means of authentication for various transactions and access to services.

The shift toward digital identity verification began with the advent of computer systems and databases, allowing governments and organisations to digitise records. This transition enabled wealth management firms to verify clients’ identities electronically, paving the way for more sophisticated digital authentication methods.

As technology advanced, biometric authentication emerged as a game-changer. Biometrics leverages unique physical or behavioural traits, such as facial recognition, to confirm an individual’s identity. This method is increasingly being integrated into wealth management platforms, enhancing the security of client interactions and protecting sensitive financial information.

To further bolster security, two-factor authentication (2FA) has become a standard practice in wealth management. With 2FA, clients must provide two different forms of verification, such as a password and a smartphone token. This additional layer of security is crucial in safeguarding online accounts from unauthorised access, particularly in a sector as sensitive as wealth management.

Challenges and Opportunities in Digital Identity Verification

While digital identity verification offers numerous benefits, it is not without challenges. Wealth management firms must navigate privacy concerns, data breaches, and the risk of identity theft and now, AI-fraud. Striking the right balance between security and usability is an ongoing challenge that firms must address to maintain client trust and meet regulatory requirements.

The Financial Conduct Authority (FCA) has made it clear that preventing financial crime and meeting Consumer Duty outcomes are top priorities for wealth management firms. This includes ensuring robust identity verification processes to protect clients from fraud, scams, and money laundering. Wealth management firms are expected to understand their clients’ financial crime risks and implement effective systems and controls to mitigate these risks.

The Future of Identity Verification in Wealth Management

As technology continues to evolve, the future of identity verification in wealth management looks promising. Innovations such as quantum-resistant encryption, AI-driven authentication methods, and self-sovereign identity are on the horizon. These developments promise to make identity verification even more secure, efficient, and user-friendly.

The evolution of identity verification from paper-based methods to digital solutions has been accelerated by the global shift to online services during the pandemic. While traditional methods served their purpose, the wealth management sector is now entering a new era of authentication, leveraging technologies like biometrics, blockchain, and decentralised identity. However, it is essential to balance security and privacy to ensure that identity verification methods continue to meet the ever-changing needs of clients while prioritising data protection.

Moreover, while there is a growing demand for virtual services in wealth management, this does not mean clients desire less engagement. The majority of clients (71%) still value regular or intermittent communication with their wealth managers. As such, while technology offers numerous opportunities to enhance client service, it must be complemented by a personalised experience that meets clients’ unique needs. An intuitive and positive ‘first-touch’ digital interaction can become a competitive advantage for wealth managers where client acquisition remains essential.

If you would like to discuss how digital identity verification can benefit your wealth management practice or learn more, please feel free to email alex@id-pal.com or connect with me on LinkedIn here.

Alexander Blayney, Global Partnerships & Enterprise Sales, ID Pal

Nature or Nurture? The role of Training and Competence (T&C) in modern financial services

Posted on September 4, 2024May 16, 2025 by Nic Dent

Training involves more than simply delivering knowledge; it also requires opportunities to practise and acquire skills. Listening to an instructor is educational, but not necessarily training. Training must lead to skill acquisition. However, being trained doesn’t always equate to competence.

An industry that encourages debate over important issues is a healthy one. Consumer Duty is driving such discussions within Financial Services, emphasising embedding processes that align with the new regulatory framework. One area sparking debate is Training and Competence (T&C), which plays a key role in fostering a competent workforce and upholding professional standards that directly impact customer outcomes.

The FCA’s T&C requirements compel firms to ensure that relevant staff possess the necessary competencies for their roles. For many, this has limited T&C schemes to professionals needing specific qualifications. Some have viewed T&C as a regulatory burden that adds costs and reduces time for profitable activities. However, others see it as an opportunity, integrating T&C into their business strategies to create value and purpose, especially as the Duty focuses on outcomes, culture, and conduct.

The difference between training and competence

Competence is the ability to apply learned skills and behaviours to achieve job outcomes. A person may learn a skill in a classroom, but the ability to use that skill in real scenarios determines competence. Competence, then, is the combination of training, skills, experience, and knowledge applied effectively to perform tasks. It’s more concerned with results than mere abilities.

For instance, while someone might be trained to perform a job, competence reflects an evolution where skills and knowledge are applied capably. It is an ongoing process where training turns into real-world proficiency.

Skill vs. Competence

If knowledge tells us what needs to be done, skills show us how to do it. Some skills are innate, while others need to be learned and continually improved. A T&C scheme provides a platform for feedback, offering individuals insights on how they are applying knowledge, whether during sales or in handling complaints.

Coaches and supervisors play a crucial role in this process. They, too, must be competent to effectively assess and coach employees. With a Continuous Professional Development (CPD) framework, skills can be honed, and knowledge can be deployed for maximum effectiveness. The relationship between supervisors and employees is key to T&C success, as it not only

enhances individual growth but also spreads best practices throughout the firm, strengthening the entire workforce.

Cultivating a T&C culture

Why invest time and resources into managing competence? Some may argue that if a firm’s culture, conduct, and customer outcomes are already strong, T&C is unnecessary. In my 25 years in the industry, I have seen firms with a minimalist approach to T&C, doing just enough to tick regulatory boxes. I’ve also seen firms that appointed T&C managers but failed to make meaningful improvements due to lack of support.

In both cases, it’s a sign that the firm may not be prioritising reputation, outcomes, or professional development. On an individual level, employees may have extensive knowledge but lack motivation to improve their skills or vice versa—plenty of skills but resistance to acquiring the knowledge that would enhance them. Ultimately, professional development is as much the responsibility of the individual as it is the firms.

Many organisations I’ve worked with have recognised the importance of effectively managing competence, capability, and conduct. They have leveraged Worksmart’s solutions to develop T&C frameworks that not only meet regulatory requirements but also enhance business performance through a well-skilled workforce. Consider competitive organisations like Team GB’s Olympic squad—they don’t rest on past achievements; they constantly strive for improvement.

T&C in a modern financial services company

The regulatory landscape is increasingly complex, and staff are under constant pressure to learn, retain, and apply knowledge. This ongoing challenge underscores the need for a more advanced approach to managing competence. The minimalist approach that once sufficed must be replaced with systems and controls that foster transparency, inclusivity, and authenticity. A modern T&C framework ensures employees understand their obligations and are capable of meeting the demands of their roles.

This can be achieved by equipping supervisors and coaches with the right data, management information (MI), and insight to drive targeted actions and interventions. A modern T&C system not only facilitates compliance with Consumer Duty but also enhances workforce capability in a smart, efficient manner.

To thrive in today’s highly regulated financial services environment, firms need more than just a box-ticking approach to T&C. A proactive and well-integrated T&C system not only ensures regulatory compliance but also drives positive customer outcomes and professional development. By investing in the right tools and frameworks, firms can transform T&C from a regulatory burden into a competitive advantage.

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If you would like to discuss with Worksmart how your firm can leverage technology to drive, monitor and evidence compliance with Consumer Duty, you can also contact Nic directly via email.

Nic Dent, Head of Market Engagement, Worksmart

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