A Treasury committee MP has claimed the Government is effectively holding the FCA to account.
Speaking at an event hosted by adviser trade body Libertatem in High Wycombe last month, Steve Baker pointed to a number of recent inquiries by MPs into the FCA that had held the regulator to account.
These include sessions on the departure of former FCA chief executive Martin Wheatley and an inquiry into the regulator’s mismanaged media briefing for its closed-book review.
Baker said: “Is the Treasury committee and Parliament doing its job? It depends what you think its job is.
“We have just had a change of chief executive at the FCA, we have just had a debate on whether or not we have confidence in the FCA and we, the TSC, did drag the FCA through a hedge backwards over the botched briefing into the insurance industry. Do we hold them to account? I think we do.”
Baker said the most effective strategy of holding the regulator to account is about challenging it over time, rather than overhauling the FCA immediately.
He said: “We need to explain why the FCA is wrong within the paradigm it currently operates, why it’s wrong to regulate IFAs in the way it does, without challenging the fundamental framework in which they operate.
“Having started to challenge the framework, then you need to engage with other like-minded groups to move the argument forward.”
Baker invited advisers to ask for meetings with their local MPs in order to have their interests represented, but said they should recognise that “IFAs will not be the largest voter block in any constituency”.
He added they need to show MPs there is a “simple problem to understand, an effective action that can be taken quickly and the rewards are positive” in reforming the advice market.
He said: “In an environment where it’s so difficult to get a good return on your savings, where fraud is rampant, where people will be over-optimistic about returns, it’s so crucial that people are well advised so they have good prospects in future. That’s somewhere for me we need to concentrate.
“If you lead with a conversation about the Financial Ombudsman Service and the rule of law and no society can withstand this level of bureaucracy, I would agree with that point, its very well made, but it’s not likely to be successful in a Friday surgery.”
Baker adds: “If one emphases the cost to yourself that will go down far less well than saying 16.5 million people are going without advice and that’s likely to have profound consequences.
“If you let an MP down and they end up looking stupid in the media for having supported you, of course they won’t support you.”