Labour is calling for the Financial Conduct Authority to regularly review product pricing and make recommendations to ministers if it identifies a need for intervention.
Speaking to Money Marketing, Shadow Treasury financial secretary Chris Leslie says the FCA should be a proactive consumer champion.
He says: “To be that consumer champion, the FCA has to have the ability to review and recommend changes to fee structures, cap pricing or anything else it considers necessary but the final sign-off should rest with a minister. The regulator should not have a free hand over the industry.”
Leslie says the FCA should review pension charges as a matter of urgency when it starts operating next year.
Guidance on the Financial Services Bill says the FCA will not directly regulate prices but will try to spot potential consumer detriment and flaws in competition by looking at “comparative prices”.
Leslie also wants to see the Financial Services Bill include a stronger requirement for firms to act in the interests of consumers.
Currently, the FCA’s consumer protection objective req-uires firms to provide “a level of care that is appropriate, having regard to the degree of risk inv-olved in relation to the investment or other transaction and the capabilities of the consumers in question”.
Leslie says this does not go far enough and Labour intends to table amendments to the requirement.
He says: “Customers do have a role in making their own judgements but there has to be a fairly broad power in the bill putting a fiduciary duty on firms so that when the FCA looks at behaviour, it can say when firms are not acting in the consumer’s reasonable best interest.”