Key drivers of retail conduct risk
Produced in partnership with Rosanna Bryant of Addleshaw Goddard
Key drivers of retail conduct risk

The following Financial Services practice note produced in partnership with Rosanna Bryant of Addleshaw Goddard provides comprehensive and up to date legal information covering:

  • Key drivers of retail conduct risk
  • Regulatory focus on conduct risk
  • Inherent factors
  • Information asymmetries
  • Biases and heuristics
  • Inadequate financial capability
  • Structures and behaviours
  • Conflicts of interest
  • Environmental challenges, change and uncertainty

Regulatory focus on conduct risk

The Financial Conduct Authority's (FCA) focus on conduct risk looks at a complicated set of firm, consumer and market interactions which reinforce and exacerbate each other and can lead to poor consumer outcomes in financial markets where consumers are buying products that are expensive and potentially do not meet their needs.

The FCA, in identifying and focussing on these areas, recognises that the way in which complex human behaviours coupled with environmental and market forces interact make it hard for the FCA to identify the causes of poor conduct and therefore decisions on how to intervene.

In focussing on the key drivers of conduct risk, the FCA seeks to identify those matters the regulator see as having been the root of conduct risk.

By identifying the drivers of conduct risk, this enables the FCA to monitor changing conditions and the responses and behaviours of firms and consumers. This focus and analysis has and continues to be used to inform the FCA's regulatory priorities and approach.

This Practice Note examines the drivers of conduct risk which are split into inherent factors, structures and behaviours and environmental conditions. For more information on the evolution and examples of conduct risk, see Practice note Evolution and examples of retail conduct risk. For more information about the implications arising from these drivers, see Practice Note: Implications arising from the

Related documents:

Popular documents