This is the regulator’s response to the consultation which ended on 26 January this year intending to clarify its powers, its aim to be more transparent and set out its expectations of firms more clearly.
Trust in financial services markets has been challenged by misconduct, said the FCA in its feedback statement, citing examples including Foreign Exchange (FX) and the sale of Payment Protection Insurance (PPI) products. On financial advice, the regulator added: “The Financial Advice Market Review (FAMR) found that low levels of customer demand for financial advice were driven by a lack of trust, following previous mis-selling.”
It said: “We have taken important steps to embed changes that will improve trust in the market, including the Senior Managers and Certification Regime (SM&CR). We must understand consumers’ experiences of financial markets, and gather information on these by cooperating with consumer bodies, analysing data from third parties including the Financial Services Consumer Panel (FSCP), and importantly, our own contact centre.”
In its feedback, the regulator outlined a number of changes including clearer progress reports during diagnostic work, topic pages with clear updates and timelines to signpost information and promises of clearer online communications.
The regulator also said understanding the past impact of regulation should help it make better decisions in future and it admitted it needed to justify the costs involved in many of its decisions explicitly laying out how they added public value.
The FCA’s CEO, Andrew Bailey in post for just four months after leaving the Bank of England, said after two financial crises in the last decade, the first prudential in the credit crunch and the second mired in conduct of business from PPI to Libor rigging and fraud, this was a very ‘sorry history.’
Bailey said: “The future needs to be radically different from the past. We owe this to the public who are the consumers of financial services.”
The FCA now regulates 56,000 firms and 140,000 individuals, more than twice the remit of the Financial Services Authority (FSA).