FCA flags governance and risk failures at high-growth firms across asset management, wealth and payments

If your firm is growing fast, this one is for you. The FCA has published good and poor practice findings (Good and Poor Practice: High-Growth Firms) from its Early and High Growth Oversight pilot, covering 15 firms across asset management, wealth management and payments between July 2025 and March 2026. This is not enforcement. It is the regulator telling you what it expects and where it found gaps.

The FCA used a data-led approach to identify firms showing signs of growth, including revenue, expenditure, staff numbers and changes in permissions or control. The stated aim was to assess whether governance, risk management and control frameworks were keeping pace with that growth. In too many cases, they were not.

The most consistent weakness was governance record-keeping. The FCA found incomplete or missing board minutes, and poor documentation of attendance, quorum, conflicts, decisions and follow-up actions. It also found insufficient conflict of interest arrangements and management information (MI) that had not been updated, with outdated MI reducing the quality of board oversight. Separately, some firms lacked sufficient independent challenge, with responsibilities concentrated among a small number of individuals.

The stronger firms in the pilot showed forward-looking regulatory judgement: preparing early for upcoming safeguarding requirements and, in some cases, deliberately delaying expansion into new regulated activities until controls for existing business were more robust. In payments, good practice firms drew on a mix of payments, fintech and senior governance experience at board level: a useful benchmark if you are building or reviewing your board composition.

Risk management showed similar strains. Some firms relied heavily on key individuals with limited succession planning or knowledge transfer. The FCA specifically flagged that this problem was most acute where third-party relationships were deepening or firms were making greater use of AI, neither of which reduces a firm's control obligations.

Financial resilience planning was another weak spot. Wind-down plans were not always current, practical or proportionate to the business. The FCA reminded firms to supplement those plans with an understanding of their notification obligations under SUP 15 (the FCA's sourcebook chapter on notification requirements).

On consumer outcomes, some firms needed to put greater emphasis on assessing fair value. The FCA warned that without active monitoring, firms may be unable to check whether products remain appropriate for their intended target market. Consumer Duty obligations apply regardless of a firm's growth stage.

The FCA has provided individual feedback to all 15 firms and has signalled it will use insights from the pilot to sharpen its supervisory approach to rapidly scaling firms, including earlier identification of emerging risks through data-led methods.

Sources

• High growth firmsfca.org.uk