Compliance Matters: Week ending 30th January 2026

May 15
4 min read

Here is a digest of regulatory issues that have come across my desk this week. Where relevant, I have provided high-level summaries and hyperlinks to documents that give further detail.

Getting your clients’ important documents in order
Bank of Scotland fined for a breach of financial sanctions regime
Executive Income Protection
The Purpose of a Business

Getting your clients’ important documents in order

We have a good number of elderly clients, most of whom have heirs and beneficiaries detailed in their Will. Statistics indicate that a high proportion of beneficiaries of a Will do not retain the services of the Settlor’s IFA, and this includes surviving spouses.

Our challenge is to make ourselves indispensable as the financial adviser for the inheritors as we were for our deceased client. One way is for us to be the single point of contact for all of our deceased client’s Adding further value to our services.

From filing cabinets to forgotten passwords, many families are without a clear picture of where their most important information is stored. While financial and end-of-life planning remains an uncomfortable topic for many, failing to organise personal affairs can leave loved ones facing unnecessary stress at the worst possible time.

Research by SafeKeep (https://mysafekeep.com/ ) found that a quarter of Britons have no idea where their parent’s keep their Wills, while 40 percent say their loved ones would not know what to do if they died tomorrow.

Meanwhile, 60 percent said the process of finding documents after a bereavement made their grief significantly worse.

Why do I say all of this.

We have the resources to be the concierge for our clients. Using IO, we can retain details of where Wills are stored, we should know the provisions as part of our KYC. We know about the assets that we manage, our KYC should tell us about the assets we do not manage.

If heirs and beneficiaries know that we are a single point of contact for all financial and other information about their parents or spouse, they are more likely to trust us to manage their inheritance.

Bank of Scotland fined for a breach of financial sanctions regime

In a statement published on 26^th January, the Office of Financial Sanctions Implementation (OFSI), part of HM Treasury, confirmed that on 10th November 2025 it imposed a penalty of £160,000 Bank of Scotland Plc in accordance with section 146 of the Policing and Crime Act 2017.

Between 8^th February and 24^th February 2023, Bank of Scotland processed 24 payments, totalling £77,383.39, to or from a personal current account held by an individual designated under the Russia Regulations. Bank of Scotland processed four payments which were credited to the Account between 8^th February and 24^th February 2023, totalling £76,000.00. Bank of Scotland also processed 20 payments which were debited from the Account between 13 February and 23 February 2023, totalling £1,383.39. OFSI has concluded that the processing of these 24 payments breached regulation 11 of the Russia Regulations. The full notice can be read here.

A sanctioned individual opened an account using a legitimate UK passport with minor transliteration differences in their name. Automated sanctions screening failed to identify the match. A PEP alert was triggered, but the manual review incorrectly concluded the individual was no longer UK-sanctioned, meaning no escalation took place.

The real problem is that this was not a single failure.

Automation failed.
Human review failed.
Escalation failed.
Training failed.
Governance failed.

The bank had followed its onboarding process and obtained legitimate documents, but small spelling variations, siloed frameworks, and procedural gaps bypassed the controls that appeared “robust” on paper. And under strict liability, intent is irrelevant, but outcomes are not.

The bank received the maximum 50% reduction for voluntary disclosure. But OFSI’s message is clear: disclosure mitigates the impact, but it does not excuse systemic weakness.

This case is not really about 24 transactions or a modest fine, but whether your control environment is genuinely resilient, or simply looks compliant on the surface.

As a business we use Veriphy to identify and verify our clients. Veriphy also checks against PEP and Sanction data. The system continuously monitors our clients for changes in their status and may produce alerts that are ‘false positives’. All our new clients come from referrals from our existing clients, and we are unlikely to encounter a sanctioned individual, but we should not be complacent as remain vigilant.

If you have any suspicions about a new or existing client, immediately raise them with Compliance. If Veriphy produces an alert, immediately raise it with Compliance.

Executive Income Protection

Your client earns £180,000 a year as a Director of an SME. If he cannot work, he is on, say, £1,000 a month. That £1,000 is not sick pay, it is what he would withdraw out of savings, and those savings are tied up in the business.

Like most Directors:

•

cash is reinvested into the business

• profits are working

• personal reserves are thin

If illness hits, the risk is not just income stopping. It is the business being forced to fund his life.

The solution is Executive Income Protection.

• The company pays the premiums.

• Cover based on salary and dividends.

• Income paid back to him if he is too ill to work.

Now if your client is signed off as sick, his income does not depend on:

• drawing down reserves