The Chartered Insurance Institute is urging Labour to back its plans for the FCA to have regard to professionalism after Labour withdrew its professionalism amendment following a lack of support.
Last week, Labour Shadow Treasury financial secretary Chris Leslie withdrew an amendment to the Financial Services Bill to extend the FCA’s consumer and integrity objectives so it has regard to “raising standards of professionalism in financial services by mandating a training and competence regime”.
Leslie told the public bill committee last week that he was surprised at the level of opposition after several committee members objected to the proposal.
It would have applied to”all approved persons exercising controlled functions regardless of financial sector” and would have seen the regulator “specify minimum thresholds of competence, including integrity, professional qualifications, continuous professional development and adherence to a recognised code of conduct”.
Success would have been “evidenced by individuals holding an annual validation of competence”.
The FCA’s current consumer protection objective will see regulated firms expected to provide “a level of care that is appropriate” while taking into account the risk involved in the investment or transaction, as well as the capabilities of the consumer.
The CII supported Labour’s amendment but has also suggested changing the FCA’s competition objective so firms provide a “level of care and professionalism that is appropriate”. CII policy and research co-ordinator Ben Franklin says: “Our proposal is about ensuring the FCA has professionalism in mind when it looks at risks firms pose to consumers in exercising its judgment-based approach to regulation. Our proposal is more realistic as it is only a slight tweak and it is not unreasonable to get professionalism on the face of the bill.”