Money Marketing’s Pave The Way to Save campaign is calling for a more constructive approach to regulation from the new Consumer Protection and Markets Authority. With the Government proposing to break up the FSA, now is the time to look again at how financial services regulation is working in the UK and improvements that can be made.
Alongside a refocusing of the regulator’s objectives to ensure policymaking encourages rather than restricts levels of saving and protection, a full debate is needed about the amount of personal responsibility individuals should be required to take on when looking after the interests of themselves and their families.
The Government has set up a behavioural insight unit within the Cabinet Office, drawing on the so-called Nudge agenda promoted by Prime Minster David Cameron. The aim of the unit is to improve economic behaviour and top of its list should be an examin-ation of the societal changes that may be required to create a culture more focused on cultivating greater personal financial responsibility.
The auto-enrolment reforms are a start but more needs to be done to persuade people that they should grow and protect their financial interests and that any state support that may be on offer in the future is likely to be meagre. The Government and the regulator have roles to play but so does the financial services industry.
As outgoing Aifa director general Chris Cummings says in an interview in this week’s Money Marketing, the IFA community is unique in financial services as its long-term interests are totally aligned with the consumer.
As agents of the client, it is the IFA community which has spoken loudest about the potential advice gap that could be created by the RDR and the damage this could do to UK society.
Over the next couple of months, Money Marketing will be doing its best to bring about a debate among advisers about the type of regulatory framework needed and the types of Government policies which will encourage a greater sense of personal responsibility.
As part of its consultation into financial services reform and its work on behavioural economics, the Government would be wise to listen to the views of a profession which makes its living looking after the financial affairs of consumers.