FCA Issues Second Section 166 Skilled Person Order Against Rathbones Subsidiary, Adding an Estimated £2.5m Cost and Reducing Future Profits
Rathbones Group, the FTSE 250 wealth manager, has received a second Financial Conduct Authority (FCA) enforcement order, this time directed at its subsidiary Vision Independent Financial Planning. The subsidiary has been issued a Section 166 notice (a statutory tool that requires a firm to appoint independent advisers to review its operations), which Rathbones estimates will cost approximately £2.5 million. In addition, the group expects its future pre-tax profit to reduce by £4 million from 2027 onwards due to a decline in the number of adviser firms working with Vision. Rathbones will continue to manage £1.9 billion in funds under management and administration (FUMA, the total value of assets a wealth manager looks after on behalf of clients) for clients tied to the subsidiary. This is the second Section 166 order the group has faced. The first, announced earlier in 2026, related to compliance shortcomings uncovered by the FCA and is expected to cost up to £60 million. That earlier order forced Rathbones to halt the onboarding of new enhanced due diligence (EDD, a heightened level of client identity and source-of-funds checking required for higher-risk clients) clients. The group said it expects to lift those EDD restrictions in the fourth quarter of 2026 and has reported 'good progress' in addressing the findings from the initial skilled person review. The back-to-back Section 166 orders place Rathbones under sustained regulatory pressure at a time when client outflows have already been a concern for the business.
Why this matters
Two Section 166 orders against the same group within a single year is unusual and signals that the FCA's concerns about Rathbones extend across its group structure rather than being confined to a single business line. The combined financial exposure, a potential £60 million from the first review and £2.5 million from the second, alongside a £4 million annual profit headwind from 2027, is material for a FTSE 250 firm. The pattern of sustained FCA scrutiny also raises reputational risk for Rathbones in attracting and retaining adviser firm relationships, which are the primary distribution channel for wealth management businesses.
On the Ground
Regulatory investigation and financial services compliance practices are the primary beneficiaries of this mandate: Rathbones will need specialist advice on managing both skilled person reviews, engaging with the FCA, and preparing remediation plans. The skilled persons themselves (typically independent consulting firms appointed under the Section 166 notice) will need to be instructed and coordinated. A trainee working on a Section 166 matter would assist with skilled persons report coordination, prepare regulatory notification drafts, update remediation trackers, and assist with the preparation of compliance gap analysis memos comparing current practices against FCA expectations.
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