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Turner calls for "teeth" to protect investors

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The Financial Conduct Authority will need new “powers and teeth” to protect consumers, according to FSA chairman Adair Turner.

Speaking at the Mansion House last night in London, the FSA chairman says powers will be needed to act early to intervene and prevent customer detriment.

He says: “In financial services the potential for the customer to be ripped off is simply far greater than in other sectors of the economy – and the consequences potentially more significant.

“The challenge for the Financial Conduct Authority will be how to counter that danger. Parliament will need to equip the FCA with new powers that will be needed to give the new approach effective teeth.”

However, Turner says all involved will need a “realistic understanding” that no regulatoy system “can, or should, try to create a nil-risk market environment”.

He adds: “So even in the best designed system problems will still emerge.”

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Readers' comments (6)

  • It is refreshing to hear an admission of failure although perhaps Lord Turner won't quite see it that way.

    Since 1988 succesive regulatory initiatives have done little to prevent the consumer detriment to which he refers although I think most of us would argue that they have already had strong enough powers and enough resources to do the job properly.

    We all accept that this is not going to be a zero risk market but attention to the main threats, and they are well known, would be a good starting point.

    What is really sad is that the media is going to pick up on his comment that the potential to be ripped off is larger in the financial services sector and this will further add to the decline of the savings rate. He realy should be more careful in his use of the language

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  • More than 4,000 sets of teeth and he wants more?

    After 20 years of regulation consumers appear to be wrose off, how is that possible?

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  • Regulation has become an uncontrolable beast. IFA's should'nt be regulated alongside banks, etc. Start again, stop banks and providers from offering advice, only allow community based IFA firms who are directly accountable to their clients to offer retail advice, put a cap on their size so that the decision makers don't lose touch with their clients. Turn the FSA model on the Government, the NHS, & MP's where it would be appropriate.

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  • Getting closer to the realization that Products need to be regulated AND not the advice process ?

    For 95% of the main market It matters not a jot what the "salesman" says if the product is correctly regulated. There is perhaps an argument for those who offer truly complex independent advice to have their advice process monitored to a degree but monitoring everday sales has proved to be both pointless and expensive - with the public paying the ultimate cost.

    Regulated the product. Ban products. Pull unfair advertising and cut down on advice regulation.

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  • Who saves us all from the effect of regulation I wonder?

    Has anyone actually analysed the "cause and effect" of regulation over the last 20+ years?

    Are people more confidence in the financial services industtry, are the saving more, are they in less debt, are they better off financially?

    Surely good regulation would acheive all of that, has it?

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  • Well at least the FSA are well qualified to understand "rip off" First class travel to USA - over the top (even according to their rule book) hotel bills - unearned bonus - packages far in excess of the Prime Minister - all at our expense (and ultimately the consumer ! --- and they do not have have to take exams to prove they know what they are doing (or not as the case may be) and Lord Turner can indulge his passion for the green cause at the same time that he is "part time" at the FSA. About time the peasants revolted !!!

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