By Joanne Wallen (Complinet)
Jan. 25 – British firms continue to be referred to enforcement despite the best intentions of the Financial Services Authority’s thematic reviews and credible deterrence strategies. On the one hand it looks as though the risks are considered to be worth taking. On the other, reputational damage and loss of trust for the whole industry are at stake.
Last week was overshadowed by the large fine that Barclays received for giving unsuitable investment advice to retail clients about two funds in particular. The fine was 7 million pounds, and the firm is also likely to have to pay up to 60 million pounds in redress, as well as carrying out a past business review and employing a firm of accountants to review customer files. The total cost of the enforcement action will, therefore, be significant.
Compared with the amount of investment a large firm would have to make to consolidate all its legacy systems into one, to revamp all its systems and controls throughout the entire group, to beef up its compliance team and to ensure that every member of staff was properly trained, the costs may not be so high after all.