Our client was the wealth management division of a multi-billion investment management business that had been subject to a s166 skilled person review concerning the adequacy of the firm’s know your customer and suitability arrangements.
Our contract was to provide remediation support services to resolve matters arising from the review. We undertook detailed sample based client file reviews targeting investment managers identified as having a higher risk of maintaining poor Know Your Customer and Suitability records. Our work identified cases where client files were not in compliance with the Conduct of Business rule, recommended remediation actions and to conclude whether the remediation had been completed.
The wealth management business was organised over several locations and we needed to ensure a consistent approach across each location. We established a common review team who maintained a consistent approach to all cases, based on pilot reviews. During the project we prepared regular progress report and attended the regular steering group meetings to ensure that the agreed timetable was met. We had an open dialogue with the client on issues with the project and we summarized issues on each case for resolution by the business.
We identified a key risk with the scope of the retail discretionary management authority under mandate provided by the firm’s clients. We needed to ensure information collected by the client was adequate to assess the client’s risk profile, capacity for loss or other objectives relevant to the mandate was sufficient relative to the mandate granted rather than a broader independent financial advisory responsibility which the client did not provide. We worked with the client to agree a level of documentation and internal control structure commensurate with the client’s regulatory obligations.
Cordium regularly works with wealth management firms to assist them with compliance matters and in particular their Know Your Customer, suitability requirements and investment processes and client reporting requirements