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FCA questions its purpose, priorities and objectives

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The FCA is to consult on producing mission statement in a bid to boost the public’s understanding of what does and its role within society.

The mission, revealed by chief executive Andrew Bailey at the regulator’s annual public meeting today, will include a proposal to be published in early autumn followed by a period of public consultation.

In his speech, Bailey said: “How to balance the duty of care towards consumers, the duty of responsibility of consumers for their decisions, the role of firms and the role of the regulator, is an inherently difficult question to which there will be many potential answers. It lies at the heart of the FCA’s mission. So far, I would say it has not been adequately answered.”

He adds: “This mission should also be the basis of answering a number of other very important questions which shape how the FCA operates. Among these I would highlight whether we should prioritise some consumers over others and how we would do this and the need to explain and justify how the FCA decides among its tools when it sees a need for action.”

Bailey also highlighted retirement planning as the “biggest single challenge” in the provision of financial services in the UK.

Speaking to press after the meeting, Bailey dismissed the idea working on a mission statement was a criticism of his predecessors.

He says: “The reason I am doing this is because conduct regulation is new, relatively speaking. There is not a laid down body of thinking that helps to guide it. If you look at the academic literature there is not a lot to draw on.”

Bailey added the mission was not related to an agenda about light or heavy-touch regulation.

He adds: “Whatever you think about the way I was appointed, I have got no agenda on that front, no different agenda from what Martin Wheatley had in that sense. It is about getting a coherent understanding and philosophical base of understanding what we do and how we choose what we do. You will not find it is a mission to introduce light-touch regulation.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Lets hope for a change of direction then.

    The FCA needs focus its resources on the scams, criminal behavior, educating the public, instilling confidence in the UK FS industry and rewarding good behaviour with a light touch regulation. Right now we have a scatter gun approach which involves micromanaging everything it touches which leads to a bureaucracy from hell for everyone – which in turn makes financial advice and products ridiculously expensive and/or the preserve of the wealthy. In all its is currently grossly inefficient.

    Fingers crossed for a change of attitudes and fresh thinking

  2. I think many have questioned the purpose of the FCA, but no doubt we will all be much clearer when the new mission statement is announced, good to know where fees go.

  3. That makes 20,000 of us asking the same question

  4. I welcome this as at least the new Captain at the helm is questioning the regulators roll. I also not he is seeking closer relations with the FOS. Maybe this individual is seeing the issues we have been screaming about for years. Hopefully he realises that until the FOS and the regulator stop providing different outcomes and rules the problem will not go away.

    I also agree with Gregg, he needs to tackle the fraud and very bad practice. Unfortunately this will only ever be achieved by letting a small percentage of consumers feel the true pain of their poor decisions. Only then, when consumers KNOW they will not get their money back, will they take greater care.

  5. He says: “The reason I am doing this is because conduct regulation is new, relatively speaking. There is not a laid down body of thinking that helps to guide it. If you look at the academic literature there is not a lot to draw on.”

    We have been telling you for years, this isn’t a matter of having something written down and a few boxes ticked, this is about knowing from experience what is wrong and what is right NOW, not when it is too late.

  6. Sounds good but then RDR was going to sort us all out and nothing we said or did was going to make them change course. Another mission statement is either just words on a piece of paper or an embedded culture from the top down where there is proper support for those of us trying to do the job at the sharp end. In other words focus your attention on those that cause the problems and that should be a good starting point.

  7. Ground, Situation, Mission, Execution, Service and Support, Command and signals.
    The mission statement should be short and sweet and stated twice so everyone knows what the game is, even if they don’t understand or remember the rest of the detail. If your O group is rubbish or your section commanders don’t challenge you, when it gets down to the grunts, it will all end up a pile of stinking poo. If the grunts tell you at the top it is, you’re lucky, they could have just shot you. Unfortunately life in F-pack land just gest them a knighthood when we tell them it’s a pile of poo.

  8. Much as I know many members of SME Alliance are hugely disappointed in the conduct of the FCA with regard to SMEs and the very inadequate scheme to address IRHP issues, I don’t want to give a glib, angry reply. From both my own point of view and many of our members, we would ask if the time has come for the FCA itself to question whether one organisation can properly deal with “consumer protection” and “market confidence”? Logic would say these two remits are at odds with each other. Some Banks, as we know, continue to breach both regulations and laws – that is a fact supported by the endless fines their shareholders have to pay. But, as Andrew Bailey himself inferred in an interview with the Telegraph December 2012 when he was part of the Prudential Regulation Authority – (taken from a letter to David Cameron)
    ” …. Mr Bailey said that prosecuting banks and by implication their executive and non-executive directors,
    “would be a very destabilising issue. It’s another version of too important to fail. Because of the confidence issue with banks, a major criminal indictment, which we haven’t seen and I’m not saying we are going to see… this is not an ordinary criminal indictment.”
    In other words prosecuting bankers would be damaging to “market confidence”. That being the case and unless there is suddenly a new political will which is prepared to over ride this position, it is unrealistic to think the FCA can do anything other than continue to protect the banks by minimising their failures, continuing to penalise shareholders with fines and keeping bankers out of the justice system.
    Surely the time has come when we all have to stop pretending one organisation can effectively multi task? We must have a more independent champion for consumers and we must stop kidding ourselves the FCA is able to be effective while it is trying to do the impossible. As things stand, and SME Alliance know this first hand, the FCA is not consumer friendly even if George Osborne and those who came before him (and post FSMA 2000) are largely to blame. When the FSA was changed to the FCA it was simply like moving the deckchairs around on the Titanic – the iceberg is still there and without effective regulation we will, yet again, hit it. It’s not realistic to think the FCA is in a position to tackle or resolve bank misconduct.

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