Review reveals asset managers’ product governance failings

Scrutiny of eight asset managers by theFinancial Conduct Authority has highlighted weaknesses in their productgovernance arrangements in relation to handling conflicts of interest, targetmarket analysis, disclosure of charges, record-keeping, as well as duediligence around distributors. By Denis O’Connor.

Denis O’Connoris a fellow of both the Institute of Chartered Accountants inEngland & Wales and the Chartered Institute of Securities and Investment.He was a member of the British Bankers’ Association Money Laundering Committeefrom 2003-10 and a member of the Joint Money Laundering Steering Group’s boardand editorial panel between 2010 and 2016. He has been a frequent speaker atindustry conferences on financial crime issues, both in the United Kingdom andabroad.

A recent review by the FCA of eight assetmanagers who produced (or manufactured) retail collective investment schemesrevealed multiple product governance failings, [1] which may have led toinvestors buying products that were inappropriate. The regulator observed thosefirms had a “significant scope to improve their product governancearrangements”.