---
title: Are You Prepared For A Regulatory Visit
description: "Financial Regulation, compliance, benchmarking, FinTech, #RegTech, client-centric, risk, BREXIT, FAMR, RDR, MiFIDII, Behaviour, advice, suitability, GDPR, Data, Chatbot, Culture, supervision, enforcement, Audit, TCF, 5 Questions, Conduct, conduct risk, Platforms, Product Governance, SMCR"
image: https://resources.model-office.co.uk/hubfs/images-2.jpeg
---

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# The Model Office Blog

## [Are You Prepared For A Regulatory Visit](https://resources.model-office.co.uk/regulatory-visit)

 \[fa icon="calendar"\] Jun 14, 2019 2:17:04 PM / by [Chris Davies](https://resources.model-office.co.uk/author/chris-davies)

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We’ve written extensively about the new FCA accountability regime and with the recent FCA [Dear CEO letter](https://www.fca.org.uk/publication/correspondence/dear-ceo-letter-due-diligence-requirements-for-self-invested-pension-plan-sipp-investments.pdf)to the SIPP market in October last year, it has now emerged, thanks to a Professional Adviser freedom of information request that [11 SIPP firms have been paid a visit.](https://www.professionaladviser.com/professional-adviser/news/3076540/fca-visits-11-sipp-firms-following-dear-ceo-letter)

There is a tendency or bias for human behaviour to think ‘this won’t happen to me’ it’s called the Ostrich effect that causes people to avoid certain situations that are perceived painful.

With the Senior Managers and Certification Regime on its way, Senior Managers in particular need to ensure their firm is set to receive a potential regulatory visit.

With this in mind it’s useful for firms to ask themselves a few questions:

**Why does the Regulator visit firms?**

There are generally 3 reasons why the FCA may pay you a visit:

1. Thematic reviews are used by the regulator to ‘assess a current or emerging risk relating to an issue or product across a number of firms within a sector or market’. So Money laundering or pricing practices are good examples, more can be found <https://www.fca.org.uk/publications/search-results?np_category=research%20and%20data-thematic%20reviews&start=1>
2. Focused work can be a trigger such as the on-going advice suitability review or scrutiny on pension transfers
3. Finally market intelligence about a specific firm’s services or financial promotions which may have come across the FCA’s radar via complaints or an internal whistle-blower

Whatever the reason the visit maybe daunting and also come with serious ramifications such as a Section 166 skilled persons review of a firms operations.

**So what can a firm do to prepare?**

1. Ensure your systems and controls are robust:This is integral to the SM&CR and ensuring you have the right people in the right place with the right skills and responsibilities will mean you stand a very good chance your support infrastructure and systems (e.g. back office, CRM, client reporting) are fit for purpose
2. Know the FCA’s agenda: Read and understand the [FCA 2019/20 business plan](https://www.professionaladviser.com/professional-adviser/opinion/3075750/chris-davies-what-does-the-fcas-business-plan-mean-for-the-sector)which focuses on key areas of risk such as measuring and managing culture through staff competence (knowledge) and conduct (behaviours) tackling financial crime, fraud and data security and off course treating customers fairly
3. Secure document management: Ensuring all compliance and client documents are up-to-date and secure is imperative, so file review processes need to be adhered to along with employing technology that can provide secure communication recording.
4. Ensure [PROD and client segmentation](https://www.professionaladviser.com/professional-adviser/opinion/3061685/chris-davies-why-proding-your-clients-is-a-good-thing)management is robust:Client segmentation and aligning this against client behaviours is essential to ensure services are suitable to meet changing client needs as they move through their investment and retirement journeys. This should be aligned to product manufactures target market criteria.
5. Financial promotions are fair and clear: The FCA has a big push on clear, fair and not misleading client communications, ([COBS 4.2](https://www.handbook.fca.org.uk/handbook/COBS/4/2.html#D298)) this with MiFID II’s product and service disclosure requirements means firms now must walk their talk on treating customers fairly principles.
6. Role play: Ensure you practice mock interviews and involve all the team including advisers, CF10’s (SMF16 under the incoming SM&CR) and Para-planners so you cover how you will deal with challenge around any blind spots that may be unearthed as well as your strengths as a business.

So firms should ensure they have a robust research and due diligence process in place that should they have to experience a FCA regulatory visit, they can do so with confidence.

Please click the below icon link to **MO®'s** #RegTech platform and learn more about **MO®** today..

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---

 

 Topics: [Financial regulation](https://resources.model-office.co.uk/topic/financial-regulation), [Financial business development](https://resources.model-office.co.uk/topic/financial-business-development), [fintech](https://resources.model-office.co.uk/topic/fintech), [regtech](https://resources.model-office.co.uk/topic/regtech), [Risk management](https://resources.model-office.co.uk/topic/risk-management), [practice management](https://resources.model-office.co.uk/topic/practice-management), [FCA](https://resources.model-office.co.uk/topic/fca), [advice](https://resources.model-office.co.uk/topic/advice), [HMT](https://resources.model-office.co.uk/topic/hmt), [suitability](https://resources.model-office.co.uk/topic/suitability), [FAWG](https://resources.model-office.co.uk/topic/fawg), [FAMR](https://resources.model-office.co.uk/topic/famr), [MiFIDII](https://resources.model-office.co.uk/topic/mifidii), [SMCR](https://resources.model-office.co.uk/topic/smcr), [Data](https://resources.model-office.co.uk/topic/data), [GDPR](https://resources.model-office.co.uk/topic/gdpr), [Chatbot](https://resources.model-office.co.uk/topic/chatbot), [Culture](https://resources.model-office.co.uk/topic/culture), [Enforcement](https://resources.model-office.co.uk/topic/enforcement), [supervision](https://resources.model-office.co.uk/topic/supervision), [audit](https://resources.model-office.co.uk/topic/audit), [Conduct](https://resources.model-office.co.uk/topic/conduct), [AI](https://resources.model-office.co.uk/topic/ai), [Risk,](https://resources.model-office.co.uk/topic/risk), [Accountability](https://resources.model-office.co.uk/topic/accountability), [Platforms](https://resources.model-office.co.uk/topic/platforms), [PROD](https://resources.model-office.co.uk/topic/prod), [Product governance](https://resources.model-office.co.uk/topic/product-governance), [digital,](https://resources.model-office.co.uk/topic/digital), [Regulatory](https://resources.model-office.co.uk/topic/regulatory), [Reporting](https://resources.model-office.co.uk/topic/reporting)

#### Written by [Chris Davies](https://resources.model-office.co.uk/author/chris-davies)

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