Seven times Grand Slam Champion, John McEnroe, was famous for his on-court tantrums which led to him forever being associated with the phrase: “You cannot be serious”. When I read recently that the Financial Conduct Authority (FCA) had refused to accept the recommendation of the Financial Services Complaints Commissioner to pay compensation of £6,000 to an IFA, my immediate response echoed Mr McEnroe’s.
I appreciate that any money the FCA pays out comes from those it regulates; none the less, it is surely the responsibility of a respected regulator such as the FCA to set an example, including a proper regard for its own independent Complaints Commissioner.
For the FCA to then ignore the judgement and offer a token £500 is a disgrace. Imagine the furore if a firm regulated by the FCA decided to pay less than 10 per cent of an award on the basis that it was not enforceable in law and because it did not want to, as the FCA said, "create an expectation that substantial compensation will be available when errors occur”. I expect the firm would be reminded of the principle of Treating Customers Fairly, and very swiftly brought into line.
The Complaints Commission is a statutory appointment under the Financial Services Act of 2012, and its job is to independently review complaints about the actions, or inactions, of the FCA. Back in 2014, when Antony Townsend was appointed as the Complaints Commissioner, Andrew Bailey, then at the Bank of England but now Chief Executive of the FCA, said: “Independent challenge and scrutiny is crucially important for the health of the regulatory system. We are pleased that Antony has been appointed as Complaints Commissioner and value the impartial judgement he will bring to the role.” His comment was right then, and needs to be acted upon now.
The issue is not how right or wrong the FCA register was, but whether the Commissioner has carried out his duty and judged that compensation of £6,000 is due. The FCA simply cannot behave as a law unto itself and must pay up before its credibility is more seriously damaged. In this instance, it needs to be game, set and match to the Complaints Commissioner.
Ken Davy is chairman of SimplyBiz Group