Last month, the Tories announced radical plans to pass prudential regulation to the Bank of England, scrap the FSA and set up the CPA to act as a consumer champion in its place.
Zurich intermediary sales director Richard Howells says if the Tories are successful, the CPA could be seen as a beacon of trust by consumers.
Howells argues that consumers currently have little trust in the Government, the FSA or HM Revenue & Customs. He says the Bank of England is seen as high-level and inaccessible and trade bodies too closely aligned with their members.
He says: “Anything that increases consumer trust in financial services is a good thing but the mandate has to be absolutely right. I am not concerned about staff being transferred directly from the FSA to the CPA. The FSA has some quality people and if they were operating under the right mandate, it could be really good.”
Howells says that while he does not support the idea of a pan-European regulator for conduct of business issues, there could be a place for a macroeconomic regulator that sits across the EU.
Financial Choices partner Richard O’Fee believes the Tory plan to separate prudential and conduct of business regulation is likely to benefit consumers. He says: “Separating the two functions will probably be helpful from a consumer point of view because they will have a dedicated organisation to deal with.”