FCA reveals extent of sexual harassment and intimidation within London market

Reports of sexual harassment are most common among London market intermediaries compared with other financial businesses, according to new data from the FCA.

Published today (25 October 2024), the regulator’s survey of over 1,000 wholesale banks and brokers, as well as London market insurance firms, revealed that the number of non-financial misconduct incidents increased between 2021 and 2023.

For London market insurers, reports increased from 102 to 239 over the three-year period – as for intermediaries in this sector, allegations rose from 89 to 246 during the same time frame.

The data also revealed the proportion of each type of incident alleged. When it came to intermediaries in the London market, 16% of people reported sexual harassment.

The figure sat at 13% for London market insurers, 6% for wholesale banks and 14% for wholesale brokers.

London market intermediaries also had the highest relative proportion of reported incidents of violence or intimidation (8%) compared with other portfolios.

However, among London market insurers and intermediaries, it was found that most people had reported a form of non-financial misconduct that had not been specified in the survey.

This included intoxication or misuse of alcohol within the workplace and inappropriate or offensive language.

FCA statement

While reported incidents of non-financial misconduct have increased, the FCA said it was likely that data could be read in different ways.

For example, a high number of complaints could be an indicator of a healthy culture in which people feel they can speak up. A low reporting rate may indicate the opposite.

Sarah Pritchard, executive director of markets and international at the FCA, 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.

“We are grateful to see a number of trade bodies engaging with these findings. We look forward to continuing to partner with them to continue to raise standards.”

Market response

The data comes after Lloyd’s of London said it was planning to overhaul its rules over poor conduct due to its current processes for dealing with bad behaviour potentially being “unclear”.

In September 2024, the marketplace said it was proposing to implement changes to “modernise and streamline” its approach and provide “greater clarity” over what it considers misconduct.

Lloyd’s chief executive John Neal said that he welcomed the FCA’s “increased focus in this important area”.

He added: “Since 2019, Lloyd’s has maintained a critical focus on supporting an inclusive and high performing culture across the corporation and market and will remain one of our top strategic priorities.

“While we are encouraged by the progress seen, now is the time to double down on our commitment and efforts to get to where we need to be.

“This means maintaining the focus we’ve placed on culture in recent years to continue transforming Lloyd’s for the better, while attracting the talent that is so vital to the success of our market.”

Meanwhile, following the publication of the survey, the Chartered Insurance Institute (CII) called on its members and the wider insurance profession to uphold the highest standards of behaviour.

It said the “survey identifies numerous cases that have the potential to undermine societal trust in the insurance profession”.

Matthew Hill, chief executive at the CII, 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.

“For our part, we will be writing to all our members to remind them of their need to comply with our Code of Ethics, which speaks directly to the outcomes the FCA is seeking to achieve.”