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Mortgage brokers among most satisfied with FCA performance

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  • 03/08/2017
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Mortgage brokers among most satisfied with FCA performance
Industry satisfaction with the Financial Conduct Authority (FCA) has grown to its highest level since 2008 while views of its effectiveness have also improved.

Perceptions of the effectiveness of the FCA were highest among the retail lending (which includes mortgage brokers) and wholesale banking sectors (7.5 and 7.2 out of 10 respectively) and was lower in the long-term savings and pensions sector (6.7).

According to the latest survey of regulated firms conducted by the FCA and the FCA Practitioner Panel, the majority of firms were generally satisfied with the regulatory relationship and believe the FCA is an effective regulator.

Relationship satisfaction increased year-on-year from 7.2 to 7.5 out of 10, with the effectiveness score rising from 6.7 to 7.0 out of 10.

 

Mortgage broker satisfaction

Contact levels were notably lower among firms in the retail lending and general insurance and protection sectors, with just four in ten firms reporting contact with the FCA at least once a month (40% and 36% respectively).

A sizeable minority of firms in both sectors also reported having had contact less regularly than once every 6 months (17% among general insurance firms; 14% among retail lending firms).

And firms in the retail lending and wholesale banking sectors also reported the highest levels of satisfaction regarding communication from the FCA – firms in both sectors gave a mean score of 7.3 (up from 7.0 in 2016).

 

Out-reach

Overall, it appears the FCA’s work to reach out to regulated firms and maintain regular contact with them has been warmly received.

While the majority of firms felt their level of trust in the regulator had stayed the same, firms were slightly more likely than in 2016 to say their level of trust had increased.

Many of these firms cited regular, personal contact with FCA staff as having a positive impact on their trust in the regulator.

Where firms reported a decrease in trust they raised concerns about low levels of experience or knowledge among FCA staff and a general lack of understanding of smaller firms.

 

Enforcement

Views on enforcement activity improved slightly with firms more likely to feel that the enforcement procedure was a credible deterrent, delivered an appropriate message to the industry, and was used in a way that better protected consumers.

There was, however, a small increase in the proportion of firms which felt the publication of fines undermined confidence in the industry.

Although satisfaction scores in the Long Term Savings and Pensions sector were broadly in line with the rest of the industry (after slumping in 2016), this sector still rated the FCA’s effectiveness below the wider market.

 

Future improvement

The survey identified three key areas for further improvement for the FCA. These were:

Ensuring that firms, in particular consumer credit firms, clearly understand the FCA’s remit; the publication of the FCA’s Mission shortly after the research fieldwork took place should help to address this;

The volume of regulatory change makes demands on firms’ resources and firms are looking to the FCA to be more transparent about future plans;

The FCA should communicate directly and clearly with firms about Brexit.

 

Encouraged

FCA Practitioner Panel chairman António Simões said: “We are encouraged by the findings of this year’s survey that there has been progress against all three of the FCA’s operational objectives.

“Last year we identified that there were concerns around the competition objective, and that the life and pensions industry was more generally dissatisfied with the work of the FCA than other sectors. To see progress against both these points is a sign that the regulator is heading in the right direction.

“The Panel will continue to work with the FCA to address the issues raised in the survey about communication, volume of regulation and the challenges of Brexit.”

FCA Chief Executive Andrew Bailey added: “We are pleased that firms continue to rate our performance as a regulator highly. But we know that we can always do better and the survey is very helpful in identifying a number of areas for improvement.

“In our Mission we committed to be more transparent, communicating clearly with firms so that they understand our role, remit and expectations.

“The survey also reflects concerns among firms about the uncertainty ahead for the financial services sector and we remain committed to delivering effective regulation which will enhance the UK financial system in the future.”

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