FSCP rejects concept of 'consumer responsibility'

The independent panel has called instead on the regulator to focus on getting the industry to deliver products and services that are fit for purpose and genuinely designed to serve consumer needs.

In its response to the FSA's discussion paper on the subject, the panel has argued strongly against the concept of "consumer responsibility".

It believes the retail market is suffering not because of consumers' actions, but because of the behaviour of firms.

It also pointed out financial products were quite different from other tangible consumer goods.

Adam Phillips, acting chairman of the Financial Services Consumer Panel, said: "The FSA's concentration on consumer responsibility is unrealistic and unhelpful in discussions about how to create an effective and efficient retail market that delivers real benefit to the consumer, the industry and to society.

"The regulator should focus its attention on the firms it authorises, not the consumers it is set up to protect."

Daniel Clayden, director of Devon-based IFA Clayden Associates, said he felt consumers should take some responsibility but there was also an issue of financial education.

He said: "Consumers have to be responsible for their own decisions but that is within a framework. We need to increase the financial awareness of the consumer so they are able to make those decisions.

"I do not know if that is necessarily the industry's job but the government has to take some responsibility as well as individuals themselves. They need to show an interest in finance."