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MAS chief backs FCA product role

Money Advice Service chief executive Tony Hobman has backed the proposed power for the Financial Conduct Authority to be able to intervene in product development.

The draft Financial Services Bill gives the FCA power to ban products for 12 months without the need for a cost benefit analysis if it sees that there is potential for detriment.

At a fringe event at the LibDem conference, Hobman said in the past the regulator has been too focused on the selling of products rather than their design.

He said: “Given the misselling scandals over the years, the draft legislation pointing to giving the regulator powers to intervene earlier in the product cycle and not be so focused on point of sale and beyond cannot be a bad thing.

“Not that the point of sale is unimportant but it was at the expense of what was coming down the pipeline. To have that power in the toolkit feels interesting and right.”

The bill also proposes the FCA, based on evidence from the Financial Ombudsman Service and others, should state publicly if it considers a product or issue is causing mass detriment.

Hobman says: “I am glad the legislation reinforces the need for the regulator to listen to the kind of information we and others will be able to feed in.”

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