Conduct Risk

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In recent years Conduct Risk has become an area of significant regulatory focus, with an increasing onus on firms to define and manage Conduct Risk explicitly as part of their risk management framework.

Conduct Risk focuses on the essence of a firm from product design to handling customer complaints. It drives to the heart of the behaviors, culture, morals and ethics of people at all levels of the organization.

There is a commonly held misconception that the issue of Conduct Risk applies only to the retail environment. The FCA places equal emphasis on conduct within the wholesale sector, and in particular, the pivotal role of wholesale conduct in ensuring the integrity of markets.

How Duff & Phelps Can Help

Our team comprises professionals with industry, regulator, operations, compliance and audit backgrounds who are able to provide a range of support from a review of your Conduct Risk arrangements and training to providing bespoke advice on specific areas of Conduct Risk such as Management Information.

We are able to adapt our approach to meet your requirements, offering timely and cost-effective solutions in line with regulatory requirements and best industry practice.  We have worked with a number of firms of different sizes and complexities and believe that Conduct Risk arrangements should be robust yet proportionate.

Our Services

  • Conduct Risk Framework Design: Working with you to design and document your Conduct Risk Framework from assessing your Conduct Risk appetite and Conduct Risk Drivers to developing Conduct Risk Management Information and governance arrangements
  • Conduct Risk Framework Reviews: Undertaking bespoke reviews of some or all of your Conduct Risk Framework (including governance arrangements) to identify opportunities for improvements to processes and procedures that would reduce the risk of Conduct Risks materializing
  • Conduct Risk strategy: Enhancing your Conduct Risk strategy and arrangements to reflect the evolving Conduct Risk landscape, taking into account the FCA’s key drivers of Conduct Risk
  • Skilled Person: Acting as Skilled Person with respect of Conduct Risk and wider Conduct of Business arrangements in line with Section 166 requirement notices or supporting a firm through the section 166 process
  • Conduct Risks: Determining the potential Conduct Risks inherent to the scale, scope and complexity of your firm’s activities
  • Policies and procedures: Creating Conduct Risk policies and procedures and updating existing policies where relevant
  • Conduct Risk monitoring: Assisting you to identify and implement the most effective means for monitoring Conduct Risk
  • Embedding: Assisting you with embedding Conduct Risk within your firm
  • Conduct Risk Management Information: Reviewing and assessing your firm’s Conduct Risk Management Information Dashboard, Conduct Risk Key Risk Indicators and Key Performance Indicators relative to the identified Conduct Risk Drivers and wider Conduct Risk Framework already developed
  • Conduct Risk Governance: Assessing, reviewing and/or drafting Conduct Risk governance frameworks including committee terms of reference, management information templates and senior management oversight arrangements
  • Training: Providing customized training to all staff on the firm’s Conduct Risk Framework and outlining the roles and responsibilities for all staff with respect to Conduct Risk
  • Compliance monitoring:  Assessing the role of Compliance in monitoring and reviewing Conduct Risk and designing, implementing and/or reviewing your Conduct Risk compliance monitoring arrangements
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