In operational terms, Butler said that advisors and wealth managers had responded well to the onset of the virus. Her outfit's priority now is to gather information about the resilience of wealth management firms during this period of 'lockdown.'

She said: "You will be receiving a short, simple coronavirus impact survey on Monday. It is relatively straightforward and quick to fill out – it can even be done on a smartphone – and you have 7 days to fill on investment management fee incomes. Some firms may exit from the market altogether. It is imperative to minimise any delay in the return of client money and custody assets and to take action ahead of time to prevent shortfalls in what they should be holding on their clients’ behalf. The preservation of client assets and money is central to our focus in the wealth management sector."

Operational resilience

On the subject of operational resilience, the FCA issued a consultative paper (CP19/32) late last year, threatening to force firms to consider how disruption to their business services might damage others, to set "tolerances for disruption" for each important business service and to test the services that they perform for weaknesses and then remedy them. The idea behind the proposals is to enable firms to go on performing their most important services with as little interruption as possible.

Disturbing times

In a revealing phrase, Butler said in her speech that that consultative document proposed new "requirements and expectations." This is evidence of disturbing trend that began in British regulation in 2007, when the old Financial Services Authority, with no recourse to rulemaking or the interpretation of rules at all, began to make unsupported pronouncements that various compliance-related activities were "good practice" or "bad practice," often without justifying its opinions. As it was not enforcing any rules and therefore its pronouncements had no force of law, compliance consultants occasionally referred to this practice as "the regulator messing with people's heads." In the same vein, after the FSA gave way to the FCA in 2013, the regulators started to insert the word "expectations" into their discourse, often announcing in various public places (but not the rulebook) that they "expected" this-or-that to happen at firms. Butler's pronouncement yesterday at least reveals that the regulator still knows the difference between rules and expectations.