View more on these topics

FCA: Financial services is heading for ‘Big Bang’-style revolution

FCA chief executive Martin Wheatley says the success of the regulator will depend on protecting consumers amidst the scale of change in the financial services industry which could be as revolutionary as the Big Bang.

In a speech at Mansion House last night, Wheatley said competition has to be brought into “every decision, in every rule, in every action we take.”

Wheatley said to do that successfully, the regulator is supporting innovation and giving the market greater clarity on its expectations, citing its guidance on non-advised and simplified advice services as a recent example.

He said the current pace of technological change “can be daunting, particularly for regulators”.

Wheatley said: “Many will rightly ask, therefore, whether we would accept change, certainly at the speed and scale we have seen elsewhere.

“The answer is yes, if it can be properly managed and consumers still benefit from appropriate protection. This is the moment on which our success will turn.”

He said the choices currently faced by the FCA are similar to those faced by the Office of Fair Trading which sought to liberalise the pharmacy market in the early 2000s.

He said: “On the one hand, there was the need for strong consumer protection. After all, consumers are generally no more versed in the finer points of pharmacology than they are on the intricacies of finance.

“But the OFT decided to reduce barriers to entry for community pharmacies, allowing any business with appropriately qualified staff to dispense prescriptions.

“Seven years after the reforms, it was estimated that the consumers were saving as much as £68m a year. More importantly, consumer protection was not lessened.

“This is the balance that we should be aiming for – change, some disruption, new models of distribution but all of it with the interests of the consumer at its heart.”

Wheatley added the FCA’s role is to ensure the right incentives are in place for both the regulator and regulated firms, meaning “the rules of the game are such that firms can thrive in the public interest”.

He said: “To better set these rules we have created, in conjunction with Henley Business School, a master’s degree in financial regulation. This will set a global standard and be open to all, including those we oversee.

“It is a fresh approach that tries to move away from the game of hide and seek – instead it will help provide certainty in a period of change and the tools so that both sides can see how financial services, even in imperfect markets, can deliver what consumers need.

“In short, it will help us prepare for the rapid change that could be as revolutionary for the financial services as the Big Bang before it. Unlike the liberalisation of the 80s, and all the cynicism that went hand-in-hand with it, we want to ensure that a competitive financial services market works for the interests of consumers, with adequate protections in place.”



Aldermore scraps IPO plans following equities slump

Aldermore has cancelled its plans to launch on the London Stock Exchange following a recent decline in global equity markets. The FTSE 100 index has fallen by 6.09 per cent in the past month and, as a result, the challenger bank has decided not to go ahead with its IPO, which was due to launch […]


Govt moves to close flexible annuity recycling loophole

Pension providers hoping to launch flexible annuity products have been dealt a blow after the Government revealed they will be subject to a lower annual allowance of £10,000. Earlier this year, Money Marketing revealed industry concerns draft rules that allowed people who bought flexible annuities to retain the £40,000 annual allowance could be open to […]

Personal tax

CPD: Personal tax

The latest edition of Newsbrief counts as 1 hour of structured CPD and covers the regulatory and marketplace changes that took place during September 2014. Visit the Money Marketing CPD Centre to answer 10 multiple choice questions and complete this CPD activity. Just click into your CPD Plan and you’ll find each month’s marketplace changes round-up in your activity list.


Older mortgage borrowers face more hurdles after pensions overhaul

It has been a tough time for older mortgage borrowers as lenders cut maximum age limits. But with the implementation of the Mortgage Market Review and the Budget announcement of new pension freedoms, things could get even more difficult, experts warn.  In the past two years, lenders have pulled away from lending to people in […]

US loan growth is not painting a pretty picture for the US economy

Written by Mike Riddell One of the current big debates in global financial markets is whether investors should believe ‘hard’ rather than ‘soft’ data, where the usually reliable business and consumer surveys have been suggesting strengthening in global growth momentum for some time now, while the economic data that feeds through into the Gross Domestic […]


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. I got excited for a moment because I thought the Big Bang referred to change and reform of the FCA, no such luck!

    As usual they are blind to their own inadequacies yet still feel justified to pontificate about others.

    A message to Martin Wheatley:

    Get your own house in order before you attempt to reform others!

  2. Wasn’t 1st January 2013 supposed to be Big Bang day? With how many more Big Bangs are we going to have to cope? An endless succession of them?

  3. Going by the most up to date cosmology theories more specifically M-Theory you are correct. Our Big Bang was one of many that have occurred in our Multiverse……..

  4. Clear Guidance, clear Guidance how about advice and set rules you cannot back track on when it suits you Mr Regulator. This night give some of us the inclination to actually do more.

    I would not risk my life work on giving guidance at this time, unless I was working for MAS who according to their terms of business are not liable for anything. .

Leave a comment