Consumer Panel calls for "fiduciary duty" on customer rights
Share
Financial Services Consumer Panel chairman Adam Phillips has called for legislation requiring financial firms to put their customers’ interests first as part of the regulatory restructure, the Financial Times reports.
Phillips told the FT that the draft financial services bill should be amended to create a “fiduciary duty” for all firms.
He said the current treating customers fairly framework was too vague to offer consumers sufficient protection, and said this was particularly true for customers who could not afford to pay for independent financial advice.
Phillips told the newspaper: “We should get the industry to look at itself and say, ‘Am I living up to my duty to my customers?’ It will drive and encourage better behaviour.”
He is also concerned the Prudential Regulation Authority and the Financial Conduct Authority, the two bodies set to replace the FSA in 2013, will not be accountable enough.
However Phillips has backed controversial plans to allow the FCA to publicise warning notices against firms and individuals before the penalty is upheld.
He said: “Publishing information drives better behaviour . . . The idea that there is a policeman out on the beat sorting things out and ensuring that people are punished is a good thing.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (1)
Anonymous | 20 Oct 2011 11:42 am
What nonsense. The market we operate in has three basic elements to control behaviour
the market itself
the regulators ( FSA, SFO, OFT etc )
politicians
Having a "fiduciary" responsibility will simply result in a load of consultancies trying to help people understand what this means to no net effect
As for publishing warning notices, i suspect this will backfire on the FSA....at present the threat of a company's name being dragged through the mud is enough to get execs to fall in line, whether or not they feel aggrieved in so doing.
Publishing warning notices about firms will cause the reverse effect
Unsuitable or offensive? Report this comment