Dear CEO Letter 1st March 2024 – Change Management

We at ISC noted with interest the contents of the Dear CEO letter issued by the FCA on 1st March 2024. The over-riding theme of the letter was around their Asset Management & Alternatives Supervisory Strategy, and it contained detail around a number of topics. It also recognised that 2023 was a difficult year for the industry in raising/maintaining assets, and that many firms had to indulge in cost-cutting and consolidation, whilst at the same time having to cope with new opportunities and increased regulation. Firm’s resources have therefore already been thinly stretched, and 2024 is likely to see a continuation of this.

One of the specific topics was that of Change Management. The FCA noted that a number of significant programmes of change have impacted and will continue to impact the industry. There is clearly a concern that asset managers may not have properly planned for or assessed risks around these change initiatives from a governance and resourcing perspective. The FCA letter says:-

“We recognise that a considerable amount of current and planned regulatory change impacts this sector, presenting challenges for firms. These changes come at a time when many firms are struggling to attract and/or maintain assets under management, leading some firms to implement cost cutting programmes. There is a risk that firms may not be adequately resourced to handle this change at the same time as transformation programmes and any strategic developments, such as mergers/acquisitions. Therefore, this year we will work to establish firms' preparedness by assessing how firms' governance and resourcing of change programmes has considered and mitigated this risk (particularly firms’ implementation of SDR, and preparedness for complying with PS21/3) to ensure that potential harms
to investors and markets are being appropriately addressed.”

At ISC we have significant expertise in change management in all aspects of the asset management space whether regulatory, product based, operational or data focused in front, middle or back office. We are able to supply experienced resources to plug short-term skills gaps, or larger roles on strategic projects requiring programme management, project management, or business analyst skills to help you ease the burden of any change management initiatives.

Please contact us for further information [email protected]