PIMFA publishes non-financial misconduct guidance

The Personal Investment Management & Financial Advice Association (PIMFA) has published guidance to help wealth management and financial advice firms apply the Financial Conduct Authority’s (FCA) updated Handbook rules on non-financial misconduct.

The guide was developed in partnership with the Chartered Insurance Institute (CII), the Chartered Institute for Securities & Investment (CISI), and law firm Clyde & Co.

With the new rules being implemented on 1 September, the FCA has outlined its expectations of firms and regulated individuals regarding non-financial misconduct, covering a range of behaviours including harassment, bullying, and discrimination.

PIMFA’s guide includes a framework for assessing fitness and propriety, worked scenarios, and a checklist to assist consistent implementation.

It has been designed to help firms exercise judgement on how best to act in certain circumstances, exploring the legal and regulatory landscape to outline the circumstances in which non-financial misconduct may constitute a breach of the Conduct Rules or impact an individual’s fitness and propriety.

The guidance also assessed the role of workplace culture, setting out the drivers of good and bad culture and the steps firms can take to ensure people feel able to speak up.

"In order to create a healthy organisational culture, it takes a values-driven commitment from senior leadership to build trust, create psychological safety and foster an environment in which people can perform and thrive,” commented PIMFA CEO, Liz Field.

“That is not always easy, and balancing the demands of running a business with taking your people with you is a daily consideration for leaders.

"This guidance gives firms practical support in meeting the FCA's expectations and, more importantly, in building the kind of workplace cultures our industry should be known for.

“Promoting the highest standards of conduct, standards with teeth, will help firms develop and sustain healthy, inclusive cultures in a sector that carries significant financial and personal responsibilities."

CISI CEO, Tracy Vegro, added: “Trust in financial services depends not only on technical competence, but also on the standards of behaviour people experience every day.

“The FCA’s rules on non-financial misconduct are an important step in reinforcing that message: poor conduct, bullying or harassment have no place in a profession built on integrity and public confidence.

“This guidance is designed to help firms apply the FCA’s expectations in practice and exercise professional judgement when difficult issues arise. That matters for consumers, for confidence and trust in UK financial services, and for showing the next generation that this is a sector where high standards matter.”

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