Time to test your conduct risk management framework
In the wake of the financial crisis the FCA championed the need for firms to overhaul the way they identified and managed the conduct risks inherent in their business models. Firms responded by developing programmes and making wide-ranging changes to their conduct risk frameworks in response to the FCA’s calls for rapid improvement. However, conduct risk does not remain stagnant and a firm’s conduct risk framework must therefore evolve as new conduct risks emerge and regulators’ expectations as to what “good” looks like continue to evolve. This note will help those charged with oversight and/or development of conduct risk management frameworks test whether their existing framework is still fit for purpose.
Key elements of an effective conduct risk framework
We set out below the key issues firms ought to consider when testing the effectiveness of their conduct risk framework and some of the key questions to be asking (please click through the headings below for further details).
How we can help
We regularly advise firms on their approach to conduct risk management, both in the context of advising on a firm’s framework for management of conduct risks and in relation to crystallised events. We draw on our contentious regulatory experience in advising firms on how to avoid pitfalls with conduct risk management and the issues that the FCA are likely to focus on. We can assist firms in understanding and aligning themselves with regulatory expectations, supporting senior management teams as they consider the effectiveness of their conduct risk framework and providing external assurance and benchmarking against peer firms.
To find out more, please contact one of the key contacts.
