The Financial Conduct Authority consulted with the industry yesterday (17 November) on their “mission”.
For those of you unaware of what this latest consultation is about, last month Andrew Bailey, chief executive of the Financial Conduct Authority, said he wanted to set objectives for the regulator.
At yesterday’s gathering in London, the regulator was eager to assert it did not wish to state what it believed should be set as the organisation’s remit.
Instead Mr Bailey urged the advisers and providers gathered in London to express what they felt should be the watchdog’s goal.
The Financial Services Consumer Panel pushed for the regulator to give the go-ahead or demand the pulling of products – to essentially become an approver of investments, pensions, mortgages, etc.
A payment processing technology provider demanded the watchdog do more about cyber security.
Virgin Money bosses called for the regulator to do more to tackle corporate culture.
Mission statements only matter to organisations that lack a mission, Mr Bailey.However while the regulator said it just wanted to hear from the industry at yesterday’s event, Mr Bailey did take to the stage and revealed his views on what his organisation’s mission should achieve.
He promised whatever is eventually decided on as the regulator’s mission it should tackle “holes” created by rule changes - such as the Retail Distribution Review which introduced adviser charging, raised qualification requirements and led to an exodus of banks from offering advice.
Call me cynical, but wasn’t the Financial Advice Market Review supposed to right the wrongs of the Retail Distribution Review?
Earlier this year Mr Bailey’s temporary predecessor Tracey McDermott admitted the Retail Distribution had made accessing advice harder by pushing banks out of the sector.
Ms McDermott said the tied advisers that used to be within banks were closed down partly as a result of the Retail Distribution Review and also because the banks realised they weren’t able to control them properly.
She pledged to address the advice gap created by the Retail Distribution Review in what would be delivered by the Financial Advice Market Review – to me that was a mission statement.
Did the Financial Advice Market Review achieve that mission?
Rather than introducing a longstop for advisers, to make the industry more appealing to new human entrants, the outcome of the Financial Advice Market Review instead pushed for ways to make it easier for robo-advisers to launch.
That was disappointing. Mission: failed. Yes, robo-advisers are a great addition but we really need more living and breathing advisers who can look a client in the eye and grasp if they can really afford to risk 20p in the pound with a high risk investment.
I wish Mr Bailey luck in his aspirations to give the regulator’s staff a goal – a focus on what they should be achieving.
But mission statements only matter to organisations that lack a mission, Mr Bailey.
Your latest consultation shows that you acknowledge the fact the FCA is without the focus it should have.
I fear you face an uphill struggle trying to get your organisation to put right what once went wrong.
emma.hughes@ft.com
