FCA boss trash talk is all too familiar

Anyone spending longer than five years in the world of regulated financial services will have heard it all before: tough statements made by incoming chief executives at the City watchdog. 

The person at the top of the financial services watchdog has to be tough

Whether it was the no-more-Mr-Nice-Guy attitude of Hector Sants, who declared the end of soft-touch regulation; or Martin Wheatley, who said he would “shoot first, ask questions later”, the Wrestlemania style pre-match verbal smackdowns are unnecessary.

So when new FCA boss Nikhil Rathi declares “I didn’t apply for the job to be liked”, nobody is even surprised. We get it. The person at the top of the financial services watchdog has to be tough. He or she has to make difficult decisions in the name of consumer protection. 

We don’t need this kind of verbal showmanship to send a message to would-be perpetrators of regulatory reprehensible behaviour. We don’t need a regulator that comes swinging into the saloon, glaring from the shadows of his Stetson hat. It’s passé and it doesn’t make potential perps quake in their boots. It just sets a tone that says ‘the regulator is going to be your enemy’. 

Nobody wants a best friend at the top of the FCA; nobody is after a bleeding heart routine when it comes to enforcement action and consumer protection. 

What they do want is someone who is fair and just in equal measure, creating a system that works for all – providers, advisers, distributors and customers. Not someone who wants to puff and posture. 

I note Andrew Bailey did not make such comments but showed more humility; indeed, Mr Wheatley later said he regretted having made that notorious quip when he took over the helm of the regulator. It was a statement that haunted him throughout his tenure.

And all this tough talk from watchdog bosses didn't do anything to prevent the structured product debacle, the problematic pushing of unauthorised investment funds, the pain of those mis-advised to transfer out of their defined benefit pension or the collapse of mini-bond provider London Capital & Finance.

So if Mr Rathi really wants to work with the financial services world to improve financial outcomes, I hope he does as he says he will do: be direct, decisive but not “feared” by the companies he will regulate. It might lead to a more productive relationship.