Rathbones Group plc has voluntarily paused the onboarding of new high-risk clients and halted inflows from some existing high-risk accounts [1].
The move signals a significant operational shift for the London-based wealth manager as it addresses systemic weaknesses identified by the Financial Conduct Authority (FCA) [2].
According to reports, the FCA conducted a regulatory review that uncovered deficiencies within the firm's UK wealth-management operations [3]. These findings have prompted the implementation of a "skilled-person" review to evaluate the extent of the failures [3].
As part of the corrective process, the firm has committed to a remediation plan spanning two years [4]. This plan aims to fix the operational gaps and ensure the company meets the regulatory standards required for managing high-risk portfolios [4].
The decision to stop accepting new high-risk clients and limit current inflows was announced on Tuesday, June 18, 2024 [1]. The pause remains in effect while the firm works through the regulatory requirements and the remediation timeline [5].
This action comes as UK regulators increase scrutiny over how wealth managers handle client money and assess risk. The FCA has recently focused on crackdowns regarding client cash, and the robustness of internal controls across the financial sector [2].
Rathbones said it did not provide further specifics on the exact nature of the operational weaknesses in its public announcements [1].
“Rathbones Group plc has voluntarily paused the onboarding of new high-risk clients”
This pause reflects a growing trend of aggressive enforcement by the FCA regarding Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols. By voluntarily halting high-risk inflows, Rathbones is attempting to mitigate further regulatory penalties and prevent the onboarding of problematic assets while it rebuilds its compliance infrastructure. The two-year remediation window suggests that the identified weaknesses are structural rather than superficial.
