Personal misconduct complaints at financial services firms down 11%

Financial services firms have come under pressure from the FCA to crack down on personal misconduct by individuals in regulated firms. Whistleblowing reports made to the FCA on personal misconduct include claims over whether an individual is fit to do their job as well as reports of bullying and sexual harassment.

The FCA has made it clear that firms need to have appropriate systems and controls in place to uphold a positive working environment and ensure their employees act with personal integrity. Where senior managers have been in breach of the standards expected, the FCA may issue fines and even ban individuals from working in the industry.

Managers are also required to have a strong handle on conduct in the areas for which they are responsible. Senior managers can face penalties if they fail to take action in response to inappropriate behaviour.

Fox says the drop in the number of personal misconduct reports is likely partly due to action taken by firms. Many have introduced mandatory internal training and leadership messaging to create a culture in which inappropriate behaviour is called out. Firms may also assess staff against a broad spectrum of indicators, ensuring appropriate escalation procedures are in place to help investigate claims.

Catriona Watt, partner at Fox & Partners, said: “The drop in the number of personal misconduct reports shows action taken by financial services firms to improve workplace culture is starting to yield results.

“Firms are increasingly aware that individuals within their organisation failing to meet standards of personal conduct pose a threat to their corporate reputation. This has prompted an emphasis on training staff to be able to identify and call out misconduct.

“As employees return to their offices in greater numbers, we will see whether the training firms have put in place to create appropriate behaviour continues to be effective.”