Labour wants FCA pricing reviews
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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.”
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Readers' comments (12)
hugh jeego | 10 Feb 2012 8:54 am
I`m up for this as long as it applies to the banks as well.
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Anonymous | 10 Feb 2012 9:03 am
Why don't they just say advisers can make £20,000pa and be done with it. If they don't like it they can go get a job cleaning windows for more money and a lot less grief!
Funny how the Financial Services industry doesn't have a say in how much FSA staff get paid and yet the industry pays them.
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Anonymous | 10 Feb 2012 9:07 am
"........... when firms are not acting in the consumer’s reasonable best interest.”
And our MPs would of course be experts at this - as shown with the expenses fiddling and main residence switching as a tax avoidance measure?
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Derek Bradley ceo PanaceaIFA.com | 10 Feb 2012 9:10 am
Chris Leslie 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.”
Now here is a thought to ponder.
As a skier, I like many am very aware of the dangers and have over the years become more risk averse and intent on self preservation.
To this end I now ski with a helmet. I do of course feel quite secure in the thought this will protect me in the event of an accident from all forms of injury!!!!
But I should in fact be more afraid and am. Ski instructors now report that the unforeseen consequence of helmet wearing is that people take more risks and as a result more accidents are caused by those wearing the very device that is designed to protect in the case of one.
The lesson here is that risk is all around you in life, the more you do to prevent accidents the more you remove the natural instinct of self preservation by way of common sense.
On a ski slope you can regulate the areas available to ski with regard to terrain and avalanche dangers. But you cannot regulate the person who decides to do something really stupid, even possibly thinking it is stupid.
That is a fact of life. Customers do have a responsibility in making their own judgements and "Nanny" cannot always be there to help.
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Anonymous | 10 Feb 2012 9:27 am
Does price controls go for clothes, food, petrol, energy, cinema tickets.......where does it stop.
How does some hair-brained politician know what it costs to 'produce', market, and maintain a financial product and, by implication, what is fair value ?
Any more intervention by these self-appointed, self-righteous twits and we may as well all go home.
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Big ears | 10 Feb 2012 9:40 am
It wont happen peeps, the FSA/FCA has stated time and again its not a price regulator - it cant be seen to be as this surely has impact on competition for which the Competition Commission is bound under FSMA to keep an eye on in relation to the FSA's rules, guidance and principles - this ministers proposal, as far as i could see would conflict with this and require ammendments to FSMA itself.
Unlikely i would say....
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Big ears | 10 Feb 2012 9:42 am
@Derek
A helmet that protects from ALL forms of injury....thats some helmet!
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Anonymous | 10 Feb 2012 10:11 am
The FCA alias the FSA should be charged with capping their own costs first and foremost. That would certainly reduce costs.
Would Mr Leslie continue to act as an MP if it were not worth his while? I very much doubt it.
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Derek Bradley ceo PanaceaIFA.com | 10 Feb 2012 10:25 am
@ Big Ears It is indeed. Skiing of course combines the exhilaration of outdoor fun with knocking down trees with your face and I need a very good full body helmet!!
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huw | 10 Feb 2012 11:43 am
Capping us at £20,000 per annum is fine. I will just work on Monday mornings and do something more remunerative the rest of the week.
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