The creation of a mission for the Financial Conduct Authority will help address “holes” created by rule changes such as the Retail Distribution Review, Andrew Bailey has said.
Speaking at a conference organised by the FCA today, the regulator’s chief executive said these gaps were often created by the “caricature” that the watchdog should say 'no' to everything.
He said: “The problem with that world as it has emerged is you can certainly as a consequence of that leave holes and gaps in the supply of financial services.
“It is arguable that in the world of financial advice that is what happened with the RDR.
“It was the right thing to do but the consequences of it is that there is a gap in the supply of advice because it has revealed the price of advice.”
Mr Bailey’s comments echoed those made by his predecessor Tracey McDermott, who admitted the RDR had made accessing advice harder by pushing banks out of the sector.
He was speaking to a conference of industry figures, explaining why the FCA has decided to create a mission statement.
The FCA’s plans for a mission were revealed in July and it launched a consultation last month.
Last month Mr Bailey said the purpose of the mission statement is not about picking sides between firms and consumers.
Speaking today he said: “To be effective we have to set out and explain the framework in which we operate.
“The FCA, like all public bodies in the UK, has been given broad objectives by Parliament.
“It doesn’t even define a market so it can be as broad as you want it to be.”
He added that the only concrete action the FCA has committed to so far is reviewing its handbook, which Mr Bailey said would be more than 6 foot tall if printed out.
Robert Forbes, a chartered financial planner with London-based Stadden Forbes Wealth Management, said: "I would say it is all nonsense. Overall the RDR is still a good thing. The fact that a lot of people cannot overcharge anymore has got to be good.
"There is definitely an advice gap but the challenge for us as a community is to be able to deliver advice to the everyman in a scalable, low-cost way."
The FCA’s consultation on its mission statement ends on 26 January 2017.