Liberal Democrat peer Lord Ben Stoneham has criticised “weak” consumer protection measures in the Financial Services Bill and urged the Government to “redefine” the fiduciary duties of investment agents.
Earlier this month, business secretary Vince Cable set out plans to define fiduciary duties for all investment intermediaries including advisers, brokers and trustees by ordering reviews from the Law Commission and Financial Conduct Authority.
This came in response to economist John Kay’s review into long-term decision making in business, published in July.
Speaking during a House of Lords debate on small pension funds on Tuesday, Lord Ben Stoneham said: “We need to strengthen the concept of stewardship and mutual confidence based on trust…I tried on two occasions to strengthen the Financial Services Bill by proposing that the current FSA regulations should be strengthened to say that investment agents must act in the interests of their customers.
“It is too weak to say, as the regulations say at the moment, that: ‘A firm must pay due regard to the interests of…customers and treat them fairly’.
“It is also too weak to say that conflicts of interest must be managed fairly. The fiduciary duties of investment agents now need to be redefined and the recommendations of the Kay review need serious consideration by the Government at an early stage.”