More FCA retail enforcement incoming (if the latest Skilled Persons stats are anything to go by)

The latest FCA Skilled Persons (SP) statistics are in, completing the data for the reporting year just gone.  We've charted them for you below (alongside the PRA's for good measure).  There are some striking trends:

• There's what looks like a parabolic increase in the number of SP appointments.  It's now past highs not seen for a few years and looks hungry for more.
• All of this rise is in SP appointments in relation to portfolio supervision firms.  Dedicated supervision SP appointments are still pretty steady year-on-year.
• The proportion of appointments in each SP Lot is roughly steady.  What's changing, though, is the mix of sectors.  Investment management is coming out of the spotlight for now, but there is aggressive new focus across retail investments, retail banking and payments and general insurance and protection.  (Wholesale financial markets are seeing an uptick too.)

It's difficult to predict where this new uptrend tops out, given that SP appointments aren't subject to the same resource constraints as apply to FCA supervision enquiries and enforcement investigations.

But here's a forecast with decent odds: in the next couple of years there will be a material rise in enforcement action against portfolio supervision firms, specifically in the retail space.  That's because an SP appointment can raise enforcement risk.  Plus, the Consumer Duty's outcomes-based approach makes retail enforcement easier for the FCA.  

To mitigate this, firms now facing SP appointments would do well to bring in all necessary expertise to manage the process with care and frontload their response and remediation work.