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Mark Hoban rules out giving CPMA savings objective

Treasury financial secretary Mark Hoban says the Consumer Protection and Markets Authority should not have a statutory objective to increase savings and protection levels.

Money Marketing recently launched a campaign,Pave The Way To Save, calling on the new regulator to have a greater focus on encouraging individuals to save and protect themselves and their families, including a statutory objective to “have regard” for increasing savings rates and levels of protection.

Responding to a question from Money Marketing at a fringe event at the Conservative conference in Birmingham today, Hoban said giving the CPMA such an objective would set the regulator up to fail.

He said: “We do want people to save more but how much they save is down to the individual. If we give the CPMA that objective it will set it up to fail. But there are other triggers the Government can pull to get people to save.”

Hoban reiterated the Government’s plans to launch a consultation on simplified products later this year. He said consumers need straight forward products which “do what they say on the tin” and enable providers to compete on price and performance.

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. Oh Dear, We cannot have a failed regulator now, can we?
    Surely the CPMA like the FSA before them should have to justify the benefit of ultra expensive regulation in terms of increased savings and protection

  2. How can a regulator fail when it has failed already and continues to do so?

    He is right consumers need products that “do what they say on the tin” but how will he do that with regulation as it currently stands?

    And even in supermarkets tins have to be bought and they are often promoted in supermarkets so hwo will he persuade people to buy them?

    RDR won’t help them so what will Mr Hoban?

  3. I thought that one of the FSA’s statutory objectives was to increase confidence in the UK financial services system, an objective in which it has failed appallingly. Surely, its successor, the CPMA, should be charged with a similar set of objectives, a clear set of criteria by which it should accomplish those objectives and sanctions for failure. In the private sector, we call them performance targets and if you fail to meet them you don’t get a bonus.

    Of course no statutory authority can dictate to people how much they should save, but surely Hoban ought to take into account the fact that the public at large is massively disillusioned with pensions (in the wake of 13 years of destructive interference from Labour) and fearful of anything to do with stock market based investments (because of what happened to the economy and to stock markets on Labour’s watch).

    A new suite of simplified products isn’t going to solve that and providers are already competing on both price and performance, held to account by the IFA sector.

    The best simple product (well, as simple as it can reasonably be) is the ISA, so not take that as a starting point and build from there?

    This could be a real opportunity to drive the savings culture forward and upwards. Instead, Hoban’s primary concern seems to be more about maintaining the present rotten, biased and self serving regulatory staus quo with a bit of tinkering with product design.

  4. I fail to see how an objective of consumer confidence can not go hand-in-hand with a remit to reduce the various gaps that have widened during Labour’s three terms.

    If the CPMA is drsigned to protect the consumer but not to promote the take up of suitable products and solutions then it will have failed from the outset.

    I fear Mr Hoban attended the infant school of economics.

  5. He (Mark Hoban) said: “We do want people to save more but how much they save is down to the individual.” How does this sit with pension compulsion i.e. Nest? Seems the powers that be can pick and choose when to make the working public save and to what minimum level.

  6. Why let a minor issue like a General Election change things?

  7. Monsieur Reynard 4th October 2010 at 4:54 pm

    I think you’ll find it’s nothing to do with preventing a regulator from failing, but everything to do with ensuring that money is employed usefully (i.e. spent) in an economy that could still collapse.

  8. The FSA couldn’t have done a worse job of encouraging a savings cuture if it had tried.

    People aren’t disillusioned with their IFAs but they are disillusioned with all the red tape and bureaucracy (security, money laundering, 30 page suitability letters just to put a few quid into an ISA). Funny how it’s only the FSA and a few politicians that think the Independent advice sector are crooks and the banks are saints – anyone with half a brain knows the opposite is closer to the truth.

  9. Where is planet Hoban?

  10. Steven Farrall (Adviser Alliance) 5th October 2010 at 12:53 pm

    More basic economic ignorance from Hoban, or perhaps political class self preservation. In any event the CPMA will fail, just as the FSA has failed. Regulation always fails in a free society because it forever tries to do something impossible which is to reconcile the billions of small decisions made each day by millions of freely interacting citizens with the demands of a bureaucracy for administrative tidiness. Plus the idea that the Man from the Ministry is possessed of unique and special wisdom not available to those same millions. That’s just risisble.

    Furthermore what the Hell are a ‘suite of simplified products’? I thought that was what stakeholder products were/are. And they’ve really worked haven’t they? Not.

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