The FCA recently launched a consultation on its Mission. I tend to be sceptical of grand statements and must admit I inwardly groaned when I first heard the idea. But having read and discussed it, there is far more value to it than your average cynic might expect.
Many firms operate in a vacuum of contact from the FCA, making it hard to know what to expect. By writing down how it will act and what it will do, it gives us a basis on which to judge its behaviour and hold it to account.
As part of the exercise, it is seeking to set out better metrics to measure its performance, too. This can only be a positive step. Moreover, it is asking for our views in determining all this. Obviously, the statutory framework dictates the scope of choice but we have an opportunity to influence the regulator’s strategy to go about its business and measure its performance.
It will also give us a better idea of what it expects from firms and consumers. It is time the FCA set out what responsibility it assumes the consumer to bear.
While the document notes many consumers will simply not read disclosure documents, it must be clear they have a responsibility to read the basics; for example, key facts documents or the essentials of a suitability report.
Setting standards of behaviour here would give us a better framework of expectations the Financial Ombudsman Service should then operate within. Recognition of reality is welcome.
We are seeing some genuine new thinking about the FCA’s approach to regulation. The Mission document is the first time I have seen it acknowledge that regulation imposes a cost ultimately borne by the consumer.
Chris Hannant is director general at Apfa