The importance of watching Dear CEO letters
Simon Collins, Managing Director FS Regulatory Compliance, was interviewed for Shares Magazine’s popular podcast about the rise in Dear CEO letters in the banking and insurance space and why they are important in the sector.
“The FCA regulates in the region of 50,000 firms across all financial services sectors. Gradually over the course of the past years the Dear CEO letter has become an increasingly important way for the FCA to communicate issues across the industry that they are beginning to get some concerns about.
“As an example the FCA did some thematic work into people transferring their pension. They had some concerns that customers weren’t being advised appropriately and so they sent out a Dear CEO letter to the sector almost as a, ‘shot across the boughs’ to say, “we’ve got our eye on this’ and we may be doing some more work around it,” so be aware that this is on our radar.”
Simon’s interview went on to explain that Dear CEO letters are becoming a vital part of helping the FCA regulate the financial services sector and that they are effecting change, both financially and culturally.
“Firms are taking these letters seriously. For example, the regulator did a Dear CEO letter to insurance companies at the start of 2020. The reason they did that was that it was very concerned about non-financial conduct. Since 2020, we have seen a significant raising of that whole area of around culture and diversity and inclusion within financial services.
“The regulator takes the view that non-financial misconduct is still misconduct and leads to ultimately poorer outcomes for the end customer.”
In the heavily regulated financial services sector Simon believes that the Dear CEO letter will continue to grow as a powerful tool for the FCA and firms should take notice to those across sectors.
Listen to the full podcast here - 18 February 2022.