Poor conduct in the advice profession reflects negatively on both advisers and the regulator as it increases the level of mistrust between the two, says FCA co-director of life insurance and financial advice supervision, Debbie Gupta.
Speaking at Money Marketing Interactive today, Gupta says the watchdog’s view of the industry is not as positive as it could be.
She says: “My comments on the state of things are not as sunny and optimistic as they might be in the future and I do not want mistrust to be how the FCA frames our relationship with advisers.
“We need a common understanding on both sides that we are in fact on the same side and we all need to get to a place where we know what good practice in the industry looks like, and how we put the public at the centre of that.”
A major concern for the FCA is advisers’ failures to call out bad practice, Gupta adds.
“Poor practice damages us all, not just the individual who does it. The culture of calling out bad practice and of whistleblowing is not yet commonplace and advisers don’t come to us when they see it is happening.”
Gupta says the British Steel Pension Scheme is a particular example where some advisers could have been more direct in their communication with the regulator on poor practice they had knowledge of.
But the constant attention on poor practice does increase the difficulty of advisers’ work.
Gupta says: “Everyday we hear stories regarding advisers and the FCA about things that have gone wrong. That level of reputational damage hurts the regulator and washes out the good work we and advisers do.
“We need to increase our focus on professionalism which means so much more than just qualifications. Professionalism is knowing what to do when there are no rules in a certain situation and no textbook method of response.
“We want this industry to be professional with strong codes of conduct alongside a principle of ‘do no harm’ and deeply ingrained ethics.”