The department will be run by Bob Ferguson who is head of wealth management and private banking.
Previously Mr Ferguson worked as head of financial crime and intelligence in the enforcement and financial crime division of the Financial Services Authority.
The department, which is part of the long-term savings and pension division, is a move towards more sector-focused departments.
The largest wealth management firms will be supervised by group supervisors, supported by the new department, while all other firms will be supervised by the new department.
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Chris Hamilton, FCA press officer, said: "The FCA has been given responsibility for supervision of wealth management and we have set up a dedicated department just for that.
"Previously wealth management came under asset management and now there is a more targeted focus on wealth management."
He said reports and thematic reviews would be conducted by the department "in due course."
The department was first announced by director of supervision Clive Adamson at the start of July.
Mr Adamson said: "We are putting in place a new supervision model that in essence focuses on ensuring firms put the interest of the customers and market integrity at the heart of how they run their business.
"This will be done by a continuation of individual firm risk assessments, dealing with assessments that may crystallize as detriment and more thematic reviews."

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