Warning for regulated firms following compliance officer fine


July 14, 2017

The fining of an individual compliance officer by the Financial Conduct Authority is a “game changer” for regulated firms, Gary Dixon of compliance consultants MomentumGRC has warned.

Today the regulator fined David Watters £75,000 for failing to exercise due skill, care and diligence in his role as compliance oversight officer.

Following an investigation the FCA found that Watters failed to take reasonable steps to ensure that the process in place for giving advice on enhanced transfer value (ETV) pension transfer exercises met regulatory standards.

This has led Dixon, who has 25 years’ board experience in compliance and risk roles, to make a stark warning to regulated firms.

He said: “While many, many firms have been fined in the past for compliance failings, and indeed some have been fined repeatedly, the singling out here and fining of an individual compliance officer for such a large amount is a game changer.

“The clear message to regulated firms is that compliance needs to be a boardroom issue and they can’t simply dump it on one person and forget about it.

“In my experience the vast majority of compliance officers do a good job in difficult circumstances, but the FCA is clear that however good a job they think they are doing, when areas are complex or contentious, they need to get an independent check to verify suitability or risk serious comebacks later on.”

And he further warned that firms and individual compliance officers must act quickly if they feel they are struggling to fulfil their obligations.

Dixon said: “For those officers who are out of their depth and struggling, they need to act quickly to prevent a similar misfortune for them and their firm’s clients.

“Robust systems are needed alongside a strong independent assessment as the best way of demonstrating their firm is meeting standards.”

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