The Financial Conduct Authority has recorded a 40% increase in non-financial misconduct complaints including bullying, sexual harassment and discrimination last year.
The findings are from the FCA’s survey, which looks at how investment banks, brokers and wholesale insurance firms record and manage allegations of non-financial misconduct.
The survey of over 1,000 firms found that the number of allegations reported increased between 2021 and 2023.
Firms reported 1,363 incidents in 2021, another 1,670 in 2022, and a further rise in complaints to 2,347 in 2023.
In the three years covered by the survey, bullying and harassment (26%) and discrimination (23%) were the most recorded concerns.
However, the large ‘other’ group of concerns (41%) indicates how difficult it can be to categorise issues of personal misconduct.
The FCA found that a variety of mechanisms through which firms identified concerns. Some firms were using their internal systems to identify potential issues, although formal processes and whistleblowing were the most prevalent methods of detection.
When the survey launched, the FCA was clear that it was likely that data could be read in different ways. It said a high number of complaints could be an indicator of a healthy culture in which people feel they can speak up, confident they will be listened to. A low reporting rate may indicate the opposite.
The FCA said the findings, published today (25 October), are being shared to enable firms to benchmark their own reporting against this peer analysis and consider if their processes for reporting and investigating possible non-financial misconduct remain appropriate.
It added that trade associations will play a key role in coordinating industry-wide analysis and actions.
The FCA expects that stakeholders from other sectors of the economy, or with an interest in workplace culture, may find this data useful.
The regulator’s executive director of markets and international, Sarah Pritchard, said: “We want this data to support financial firms by providing their management teams and boards with an opportunity to consider if they stand out, and, if so, why that might be.
“The data requires context and careful interpretation. But in being transparent we hope financial firms can benchmark themselves against their peers.
“Healthy workplace cultures are essential across all the markets we regulate – where non-financial misconduct is allowed to persist it can undermine trust and confidence, and create a culture where wrongdoing goes unchallenged, causing harm.”
The Chartered Insurance Institute (CII) has responded to the FCA’s survey, saying it identifies numerous cases that have the potential to undermine societal trust in the insurance profession.
Chief executive of the CII, Matthew Hill, said: “The FCA’s survey results make for uncomfortable reading, but equally highlight an opportunity for our professions to make a real difference.
“The CII supports what the regulator is seeking to achieve, professions in which everyone can thrive, regardless of their background, and workplaces that are conducive to professional success by eliminating conduct and behaviours that can stifle, harm and obstruct careers.”
Does this data include retail and investment banks? Given that the majority of financial advice firms are small is there any evidence of smaller firms being better or worse?
This is utterly farcical – and the FCA should not be seeking to regulate anything other than advice and behaviours relating directly to it. The UK has employment tribunals and advanced civil and criminal legal systems to deal with other forms of misconduct. Only once their processes have been followed and reliable verdicts delivered should the FCA become involved. The FCA should not become a substitute for due legal process in matters of conduct unrelated to its core competencies. We are not funding the FCA to continually widen its franchise to a degree far wider than its statutory function.
I expect there’s been a 40% rise in complaints against or at least about the FCA as well, but the FCA will be sure never to make that public.