Networks’ systems and controls could face further stress and risk in 2012 and beyond, according to the regulator.
In its 2012 Retail Risk Conduct Outlook published today, the Financial Services Authority says its supervision continues to find network risks which relate to oversight of appointed representatives, monitoring procedures and compliance levels.
The paper says: “As the retail distribution review (RDR) implementation moves closer, pressure is likely to increase on firms to complete the implementation of adviser charging and to have progressed sufficient advisers qualified to Level 4 standard to deliver their business plans. This may place further strain on compliance and systems resource in the short term and may have a financial impact beyond 2012.
It raised similar concerns in last year’s outlook. (article continues below)
The paper also says networks’ compliance functions will be further stretched as more advisers look to AR status in networks as a way of dealing with RDR requirements.