Your IndustryOct 2 2020

FCA has provided an 'opportunity' for advisers

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FCA has provided an 'opportunity' for advisers
Pic via Pexels

In the week that Bake Off returned to our TV screens and documents revealed President Donald Trump’s businesses paid $750 in federal income tax in the year he won the presidency, advisers received both an opportunity and a challenge from the regulator.

The Financial Conduct Authority’s call for input on the consumer investment market has been hailed as an opportunity for advisers to submit their views on risky products and how the Financial Services Compensation Scheme could be better managed.

Considering that just a few months ago the FCA was on record stating there had already been a review of FSCS funding, and there would be no further review on it because of the complexity of such a change, this was welcome news. 

Coming on the tails of the FCA’s own consultation regarding a cap on the maximum redress it will have to pay for future claims, as well as the various campaigns - including Financial Adviser’s own letter-writing campaign - this has been hailed as a positive move. 

The idea that ‘polluters pay’ more of the share of the levy has also been raised as a possibility, which advisers have long called for.

However, a wider debate over a product levy was dismissed by outgoing chief executive Chris Woolard, during a press conference held at the FCA’s annual public meeting.

As reported by FTAdviser, while the FCA is to review the possibility of a risk-based levy as part of its call for input, a product levy has been branded as too complicated, with too many potential players involved in the shaping of it.

This has been received with disapprobation by product levy proponents Robert Sinclair, chief executive of the Association of Mortgage Intermediaries and by Ken Davy, chairman of SimplyBiz. 

Both of these industry stalwarts have been advocating a simple, product-based approach to funding and, as Harry Katz has said, consumers have already been used to paying as part of product charges in any event. 

Reducing the cost burden and regulatory barriers to entry will help give young people a great career choice in financial planning and paraplanning.

The news came amid further lockdown measures announced by the government, while chancellor Rishi Sunak unveiled his Winter Economy Plan, as reported last week by FTAdviser.

The plan aims to help businesses and individuals who will continue to feel the impact of Covid-19 restrictions - especially should a second wave engulf the UK - and to bolster businesses through loans. 

While industry commentators have broadly welcomed the support package - which comes in lieu of the Budget, which is no longer taking place this autumn - they also expressed hope the government would do more to support trainees.