‘Regulator’s actions are post-event’: FSCP’s Blair
Access to financial services and basic products is key to EU legislation and it is mandatory to ensure that these products are also affordable, Kay Blair, vice-chair of the Financial Services Consumer Panel, has told FTAdviser.
Ms Blair was also elected to be vice-chair of the European Insurance and Occupational Pensions Authority’s insurance and reinsurance stakeholder group which came as a surprise to her “as I didn’t think many in the industry would vote for a consumer person”.
The stakeholder group has 30 people on it and to make business more manageable it has various sub-groups and working groups. Ms Blair has led the work on variable annuities and it recently published its work on good practice. She was also involved on a workstream on complaints handling and a consumer protection sub-group has been set up to look at the implications of Solvency II in terms of access to products, affordability and also liaising very closely with Eiopa’s consumer protection and a financial innovation committee.
Ms Blair says: “I think one of the challenges from a consumer perspective is that much of the discussion is hugely technical around Solvency II and very much directed towards the industry. One of the challenges is to make sure consumer representatives are engaged at the right level where they can make a meaningful input. I think that’s a challenge throughout the EU, in engaging consumers.
“The details of that I don’t know yet but it is something that I am very keen to press Eiopa on and to press both the FCA [Financial Conduct Authority] and the PRA [Prudential Regulatory Authority] on, in terms of the implications.”
Current EU issues
“There are a number of these. Obviously access to financial services and basic products is key, whether that be banking or basis protection accounts. I think it is really important to access these products but to also ensure they are affordable.
“People talk about access but don’t automatically think about affordability – you can have access to it but consumers can’t get the benefit if it is unaffordable.”
The consumer panel has been “very supportive” of the FCA in terms of having more product intervention powers.
“It is interesting that Esma [the European Sales and Marketing Association] has powers to intervene when it sees something that is particularly toxic and I think will be good if these powers were strengthened [for the FCA] somewhat as I think they are pretty rudimentary as they woiuld be used in a real crisis.
“Rather than waiting for something to become toxic, [the FCA] could be a bit more proactive and look at the risks to consumers and the way they are sold. PPI is a fantastic example and had PPI been stemmed at an earlier stage it would have caused less hardship and less heartache so I think we will be very keen for to be given additional powers for product intervention.”