A law firm has warned advisers to be wary of regulation under the Financial Conduct Authority as it will be more politically aware and more powerful than its predecessor.
Speaking at the Personal Finance Society annual conference in Birmingham last week, CMS Cameron McKenna partner Simon Morris said the FSA brought significant change to the market through the RDR, without the new statutory powers it will soon be given.
He warned with the additional powers of product intervention and publicising enforcement at an earlier stage, the FCA will be capable of much more.
Morris said: “The regulator says it will take a more pro-competition approach to regulation. Just think how the FSA has completely changed the face of retail advised sales with the RDR. It has got no express statutory power to do that. It has got no express mandate. It made it up as it went along, and it is utterly altering the retail advice market.
“If the FSA can do that, just think what the FCA could do with an express statutory power and mission to take a more pro-competition approach.”
Morris argued the FCA is keen not to relive the attacks on the FSA for being asleep at the wheel in the run-up to the financial crisis and failing to regulate banks such as Northern Rock and Royal Bank of Scotland.
Morris said: “The FCA wants to be seen to be taking bold and decisive action because that is what will win it plaudits in the Daily Mail and before the Treasury select committee. We have got a very politically savvy regulator. Think how the FSA has been kicked and kicked over the past three years for having not been a very brilliant regulator. The FCA’s key objective is to make sure it is never in that position.”