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Martin Wheatley: FCA will ‘shoot first and ask questions later’

Financial Conduct Authority chief executive designate Martin Wheatley says the new regulator will work on a “shoot first and ask questions later” basis, ahead of a document next month which will set out the new regulatory approach.

Speaking at an Association of British Insurers conference on conduct regulation in London this morning, Wheatley (pictured) discussed the new powers the FCA will gain under the new regulatory structure, such as publishing warning notices at an earlier stage and the power to intervene in risky products and ban them from being sold.

He said the product intervention powers are not expected to be used frequently.

But he said: “The key difference between the future and now, and forgive me for being scary in my use of analogy, is we are being given the power to shoot first and ask questions later. Today’s approach is we find a problem and do lots of analysis, then we publish a set of draft rules and do a cost benefit analysis, we consult with the industry and you tell us we have got it wrong, and we publish another set of rules. A year later we get to the point where we think we got it right first time. We have got to reverse that process.

“The presumption is we will step in to make temporary banning orders, where products or certain features are removed, or removed from particular parts of the market, and then we will do the consultation and cost benefit analysis.”

The FSA will publish an “FCA approach” document next month which will set out how the FCA will differ from the FSA, what the new regulator can expect of firms and what firms can expect of the FCA.

Wheatley said the document will set out in detail the FCA regulatory approach to issues such as supervision, policy, authorisations, enforcement, and the regulator’s new powers.

He said: “Next month’s document will tell you how we intend to deliver against our objectives, how we intend to make sure markets work well in the interests of consumers, what we expect from firms, and how business models will be evaluated against the objective of good outcomes against consumers.

“It will also set out how our thinking is evolving in terms of the use of product intervention powers, competition powers, and some of the new aspects of regulation we are being asked to take on under the new bill.”


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There are 44 comments at the moment, we would love to hear your opinion too.

  1. Shoot first and ask questions later? Seems the definition of an overmighty being.

    Bet the FCA issues the banks bullet proof vests

  2. I had high hopes for the new regulator, however I am now disappointed. It looks as though we have replaced one dictator with another. I fear for the financial services industry in the future. I thought that the object was to get people to save and protect themselves. Obviously my hope has two choices, Bob Hope and No Hope.

  3. In other words the FCA is going to shoot you first and then ask you why you are dead afterwards. Very clever Martin

  4. This is a revealing statement about his thoughts on consultation, “a year later we get to the point where we think we got it right first time.” Perhaps its me, but this appears to suggest that he believes the regulator is invariably right first time and that consultation is a waste of time. If this is the case then this is fairly disappointing, the sentiment itself is fairly alarming, this is not some tin pot despotic nation. Like many, I have high hopes that the regulator displays a thoughtful, intelligent approach rather than one of a trigger happy “enforcer”..Judge Dredd type. So giving the benefit of doubt, I assume that a huge piece of context is missing here? after all if we all acted in a similar manner, no doubt we would find outselves having to explain our actions?

  5. Shoot Hector & Adair now before they escape! No change then – seem to remember a phrase ‘Be scared, be very scared’ from a predecessor! Why not just regulate properly then you won’t need to talk rubbish like this. Pity he didn’t do this when in charge of the HK Regulator. Another failure shoe horned in to do a job they are not capable of. I can tell you the differences – no need for a document – we have a C instead of an S.

  6. Roman Duzinkewycz 18th September 2012 at 2:11 pm

    Let’s just replace one cowboy with another then eh?
    Just unbelievable – again, who appoints / runs this shower?

  7. Interesting.

    You have to admire his candour.

    Having admired his candour you then have to question the sanity.

    Think EEA, think stupidity.

    The consuktation and analysis approach is clearly the only rout to go, but because this assumes the relevant competence to do the analysis and then draft reasonable rules to suit, we have to default to this unsatisfactory knee jerk set of principles?

    Ian Coley
    Medical Investment Services

  8. Lets hope this shoot first approach is applied to products rather than advisers.

  9. So, it’s official …… Martin Wheatley aspires to be the Simon Harwood of the financial policing world.

    Joking aside, I would like to hear his thoughts on the FSA’s handling of the Arch cru debacle, and whether he intends to redress the current abuse of power.

  10. Better to remain silent and be a thought a fool than to open your mouth and dispel any doubt.

  11. This is truly a very very silly thing to say.

    I suspect we are all a bit fed up of these self styled Clint Eastwood regulators who have been given the power to snatch livelihoods and ruin lives without the need for anything as inconvenient as evidence. They know nothing and have no respect from anyone they regulate.

    More disappointing drivel from an intellectual delinquent.

    I had hoped the FCA might be different. Sadly we have the same low brow, flat foreheaded fools who will continue to ruin good businesses whilst missing any actual problems.

    Even the banks hate them and so do I.

  12. I think you should bring back ducking stools Mr Wheatley. That’ll show you really are a tough one.

  13. I find Martins gun toting twattery even more tiresome than Hectors (to misquote The Thick of It)

  14. If the regulator conducts due diligence of the products it authorises then there is no need to shoot at all.
    In fact, the terminology is not too distant from the “be very afraid” comments of his predecessor.

    At no point do I read of, or get any feeling for, the missing regulatory component of balance.

    In effect he is saying that having authorised a product the FSA might take hindsight action if it does not like the product. How, I wonder, does this fit in with Linda Woodall’s statement that after January 1st all financial advice will be up to scratch?

  15. How disappointing! There is obviously a lot of the speech not included here but then to even include a line ‘Shoot first ask questions later’ suggests a rather immature mindset – or ability to write speeches (did Clegg’s mate knock this one up too?).

    After Hector’s threats and subsequent failure it all just sounds a bit ‘same old, same old’. No doubt many innocents will get caught in their reckless crossfire and the bad guys will continue as they are now. I just don’t feel comfortable having a gung ho USAF ground attack pilot throwing his cluster munitions about UK Financial Services – or a very unpopular guy from the Hong Kong FS world wanting to sound like one just to get a point across.

    Maybe they ought to try a little of the old ‘hearts and minds’ – many of the good guys and girls know who the baddies are and thought things like PPI, Arch Cru etc… were rather ‘iffy’ years before Hector’s foot soldiers cottoned on (or were allowed to cotton on) to the matter.

  16. How odd that Private Eye referred to Wheatley as the new sherriff in town (P31 Eye1322) and he comes out with this wild west cliche.

    Perhaps one of the risky products the sheriff would like to ban is Hong Kong minibonds. He he he!

  17. As others have said – Be afraid; be very afraid of getting shot. Was this a statement from the Financial Services Authority or the Free Syrian Army?

    So we are going to have a regulator who behaves like Anders Behring Breivik. How charming!
    Pray tell me what happens if he shoots the wrong person? Seeing as this outfit will remain unaccountable, there will be no redress, no sanction, and no comeback. The colleagues of the deceased might be lucky and get an apology – fat lot of good that will do for a ruined business.
    Where do they find these people? Don’t they get any coaching about presentation or PR? How do statements like this help to foster any vestige of mutual respect?

    I for one am wearing Kevlar from now on!

    It really is all very, very sad.

  18. For all the supposed misselling scandals, it seems the ones talking like cowboys are in Canary Wharf.

  19. looks like the first thing he has shot is himself “in the foot”

    I am in no doubt that the FCA will be no different than the FSA short of the replacement of a c instead of an s

    What a bunch of inbred web fingered mumpties

  20. Interesting. He says shoot first and ask questions later if they find a problem with toxic products etc. I wonder if the first bullet will be fired at the FSA staff executive who signed off the product to be let loose on the public in the first place? That would be both novel & an excellent start but alas I fear not. That having been said as long as we do what we have done for many years and simply advise clients on pensions, Insurance bonds, OEIC’s, ISA’s and life cover (and mortgages if you are enough of a masacist) etc then I dont think we have anything to worry about. Lets get back to basics and keep it so simple that even the FSA/FCA understand it. Soon the Regulator will shrink in size when they find little wrong with the industry and dont need so many people. Part of the problem has been the “higher qualifications” since way back when and right up to present day. The problem being that some advisers actually believe they are capable of understanding & putting into practice all the cr*p they put down in their exam answers. There is a world of difference between exam theory and practice but they dont realise that in practice it can go so horribly wrong. For those of us who are still around in a year or more and who stick to basics, the future is soooooo bright we are going to need factor 56 to keep us from harm. Whoop whoop

  21. Saint Francis of Assisi 18th September 2012 at 4:09 pm

    I hate him already – what a disappointing loser.

  22. his choice of words is indeed surprising, but we have all seen products in the marketplace that should have been closed down way before they eventually got stopped.

    So if all this is about is acting with much more speed, then it is to be applauded. If however the rhetoric belies an attitude rather than pace then there are indeed concerns. He will need to act responsibly though as no one is above the law

  23. Not got off to a very good start has he? Can’t imagine anyone deliberately courting these responses. I haven’t seen so much balanced, accurate and well deserved vitriol on these pages in years! It has ‘made my day’ – or did he say that?

  24. Anonymous @4:11pm

    Correction – the FSA and FCA are above the law so watch out.

  25. I only pray that if there is a God, he will assist the IFAsector to survive because the FCA certainly isn’t going to.As has been seen in the past it is IFAs who are generally shot first, not prouct providers. E.G – Keydata is a good example, the FSA knew there were issues in 2005 and did nothing until 2009.

    We are truly entering into the undiscovered country and with everything else the regulator is doing to stifle business, I wonder how much more can be done before we all crack and leave. Not much I bet !

  26. OK so the comment was a bit gung ho but is it not worth waiting to see how this pans out in practice?

    There can surely be little harm in intervening if something looks dodgy rather than letting an errant scenario develop and then trying to close the gate after the horse has boted [apologies for mixed metaphors]

    Unfortunate choice of phrase perhaps but I think the message is fair enough. Prevention is better than cure after all and unless the FSCS funding model is revised, that has to be a good thing.

  27. @ Ned Naylor

    Your paraphrasing of a quote from Hamlet (“the undiscovered country from whose bourne no traveler returns”) may unfortunately prove to be accurate, as the country in question is a metaphorical reference to death.

    Not that those gunslinging oafs at the FCA are likely to be familiar with the works of the Bard. However, if they are, then they would probably recommend that the UK’s banks follow Polonius’ advice to Laertes (“neither a borrower or a lender be”).

    No doubt it will all end in tragedy.

  28. I’m afraid Mr Wheatley’s comments are naive,disappointing,immature, and simply not what is expected of a senior regulator.

    It appears he has no intention whatsoever of using this opportunity to implement a more professional regime that recognises the potential consequences of a deficient regulator.

  29. I can understand him thinking it, but in his position saying it is just crass and unprofessional. Sort of thing one might say with one’s mates in the pub, but this was clearly for public consumption. Who on earth trains or guides these guys??? Of course if it were the CEO of a commercial organisation this would be a “Ratner moment” but in the fuzzy fluffy world of publicly funded bodies there’s no commercial penalty. Probably encourages this sort of d**k swinging hubris, but really the head of a regulator shouldn’t fall for it.

  30. If the FCA have got a bit of sense and really want to maintain/save the credibility of the financial services, they may be right to shoot before they ask any questions, but please do shoot and get rid of products you do not think are any good swiftly and quietly and do not allow them first to prosper and then give the products and the providers the tumbs down/negative publicity afterwards, PPI is only one recent example of so many – and totally destroy the reputation of the whole financial sector as well as the regulator in one big swoop.

  31. I find this incomprehensible.The problem with threats is that they just cause division and resistance. Surely he should be seeking the co-operation of the finance industry not issuing threats.

    I suggest that he would be better off reviewing internal procedures, making his staff responsible for and accepting responsibility for what they do. In the past there has been too many bonuses and too little discipline within the regulator in a period when they have failed in what they were supposed to be doing. (if they had been successful they would not be being disbanded).

    Set an example by cleaning up your own house and that will gain you the respect of the people you are regulating. It is respect and co-operation that will make the regulator successful, not fear and ‘action film star posturing’ No one takes Arnie or Rocky seriously they are just escapist entertainment. Join the real world.

  32. If you do nothing wrong and follow the rules what have you got to worry about. If this style of regulation stops miss selling in Banks and large organization I welcolme it.

    I would like to say that why do the regulator not licence products, as it always seems strange that we are always trying to close the stable door after the horse is bolted.

  33. It would be heartening to see some mention of more constructive engagement and cooperation with those elements of the industry that could help the regulator identify issues of bad practice and potentially dangerous products with a view to the FCA taking action that could be seen as swift, effective and appropriate.

    Instead, what Mr Wheatley appears (from this report) to be saying is that the FCA will go straight in with its hatchets and sledgehammers, possibly prematurely, and only later check whether or not that’s actually been the right thing to do.

    It’s hard to see that as a positive development.

  34. The FSA/FCA will never formally licence products because it would be required to accept the consequences of getting it wrong.

    You need to look no further than the Arch cru debacle to see how the FSA acts when its own competency is proven as inadequte.

  35. The Hoarse Whisperer 19th September 2012 at 1:54 pm

    Peter Herd – Your comments are extremely naive.

    The problem with asking questions afterwards is that you don’t know whether the person you’ve just shot is guilty of the crime.

    I’ve worked in organisations that have been subject to failed FSA enforcement before. After lots of shouting and offensive letters they eventually send in the lawyers who look embarrassed and apologise. There is no case to answer.

    In that particular case there was no long term harm done to the business because it wasn’t public knowledge. If the business had been closed or named and shamed it would have folded and around 25 staff would have lost there jobs.

    You may think your business is perfect (we did with ours) but the FSA can always find fault. Be careful what you wish for.

  36. @The Hoarse Whisperer

    Sadly, I must agree with you. Sometimes when mistakes are made, it is more cock-up than conspiracy.

    In the FSA’s case, few people would argue against the widely-held belief that the FSA has an agenda against the small IFA and wishes to deplete our numbers by fair, or foul, means. Arch cru and KeyData being good examples.

    If Sherrif Wheatley wishes to regain any credibility then he needs to announce a full, and independent, enquiry into the FSA’s mishandling of the Arch cru fiasco.

  37. Shoot first, ask question later? How did this tw*t get the job? Here we go again…

  38. musical chairs, new stationery and pens, same staff.

    same undemocratic, unbridled, unaccountable power.

    labour messed up with the tripartite regime and the tories are replacing the same system with well the same system.

    may be this guy Wheatley is in a competition with his mates to see how much guff he says get published and if he wins he gets the stake money.

  39. To The Hoarse Whisperer

    I don’t think my business is perfect as no business can be perfect as we’re always learning, I would hope however that my attitude is to try and do no harm.

    It is clear that our industry has not always had that attitude with the ever increasing complexity of products that are purely designed to benefit providers rather than consumers.

    I like many would welcome a regulator to license products before they come to market but unfortunately that doesn’t look like a reality and so we have to rely on a regulator to monitor the beahviour of product providers and advisers.

    Maybe an attitude of the regulator should not be to shoot first and ask questions later as nobody wants to see that, but nobody wants to see a regulator sitting on it’s hands and doing nothing and then only picking up the pieces when it all falls apart which the FSA has been guilty of.

    I don’t know about everybody else but I’m a bit fed up of being labelled in the same category as some of the other people responsible for all of the misselling or mismanagement of our banks, so if a stronger regulator raises standards and public perceptions then I’m sorry that may make me naive but I hope that that naivety becomes a reality, as I would like to go somewhere and pass the cocktail test. Meaning when somebody asks me what I do for a living they look at me with some respect rather than running a mile.

  40. i have just read the whole speech. it is actually quite balanced

  41. RegulatorSaurusRex 20th September 2012 at 10:50 am

    Can they use the gun in a game of Russian roulette first, they can take their time and buy a gun and a box of shells each, let’s call it a Christmas present from the fish in the barrel..

  42. Haven’t had a chance to read the speech but the use of the phrase ‘shoot first and ask questions later’ by a regulator anywhere is simply foolish. And why did it take a year to ‘consult’? I recall the first time I saw a client with single premium PPI – £4k lumped onto a £20k car loan from one of the high street banks it took somewhere around 30 secs, call it a minute because I had to read it again, to realise they had been well and truly stitched up. Now I realise there is more to it than that but a year more? Come on! Just checked the file, it was 2003, a decade and approaching £10bn of misselling ago.
    As for the FSA not finding anyone individually culpable for £10bn of misselling, perhaps they shouldn’t be looking beyond their rather expensive doors…..
    I fear this lot will be no better, he certainly is starting off just like Hector and he will be in the same house.

  43. Oh dear. The head of the new regulator who is as out of touch with the industry he is trying regulate as the clowns he has been brought in to replace.

  44. @RegulatorSaurusRex

    What a good idea!

    Although may I suggest that they opt for an automatic pistol, rather than a revolver …….

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