Almost a quarter of advisers are not yet with compliant the Senior Management and Certification Regime (SM&CR) that comes into force in December 2019, with 15% are unaware what it means.
This could put pressure on their businesses as the clock ticks down say the authors of a recent survey of the 325 users of Intelliflo’s Intelligent Office.
It said that almost two thirds of advisers are well on the way to being compliant.
The SM&CR involves extensive new obligations for financial advisers and wealth managers. According to the FCA, the regime “…aims to reduce harm to consumers and strengthen market integrity by creating a system that enables firms and regulators to hold people to account.”
Its main aims are to:
• encourage staff to take personal responsibility for their actions;
• improve conduct at all levels;
• make sure firms and staff clearly understand and can show who does what.
The FCA introduced the SM&CR for banking firms in March 2016, but it didn’t cover solo-regulated firms. Changes made by the Bank of England and Financial Services Act 2016 required the FCA to extend the SM&CR to all firms authorised to provide financial services under the Financial Services and Markets Act 2000 (FSMA).
Nick Eatock, Intelliflo’s Executive Chairman, said: “One of the key elements for firms to consider under the SM&CR is their relationships with third parties, particularly providers who are integral to the running of their business. Due diligence with providers – and the ability to show clear records of this – will be even more important once the regime comes into force so using firms that can facilitate this will save advisers valuable time.
“As with the introduction of the GDPR in 2018, there is plenty to do to ensure a firm is compliant with the SM&CR. Even if advisers are confident that they are doing everything right, the ability to evidence this will be vital should the regulator coming knocking on their doors.”