Skilled Person Report to evaluate the governance and systems and controls for a private bank
This Skilled Person report considered the broad control infrastructure of the firm including its governance and accountability arrangements, discretionary portfolio management processes, suitability and appropriateness, customer communication, engagement fees and charges, and operations arrangements.
We initially reviewed the firm’s overall governance arrangements, considering each of the firm’s trading entities and how reporting was consolidated at ‘Group’ level. This included assessing SM&CR arrangements, personal accountabilities and governance over the firm’s financial and non-financial resources.
Having completed the governance work, we reviewed the customer related systems and controls. We first considered the firm’s approach to portfolio construction and then reviewed a series of client files to assess the suitability assessments, the subsequent portfolio construction and the communication with the customer to ensure that the portfolio was in line with their risk profile. We looked at files over a period of time to assess whether portfolios continued to meet requirements and were adapted when a client’s circumstances changed.
Following a review of the customer files for suitability and communication, we assessed the firm’s fee structures for their value and then the application to each client file in our selection. We reviewed customer statements as part of this element of work. We then reviewed a sample of back office processes including reconciliations, corporate actions and dividend processes.
We identified a number of opportunities for the firm to enhance its arrangements, particularly how the different trading entities engaged. The firm has taken a number of steps to simplify and enhance these elements of its work which will improve the consistency of customer outcomes in future.