The Financial Conduct Authority (FCA) is set to increase its focus on competition, senior regulation consultants have predicted.
Jacqui Hughes, head of wealth and asset management regulation for KPMG UK, and Andrew Glessing, head of regulation at Alpha FMC, said the FCA was taking a more direct approach to encouraging competition since it received the mandate to do so from the Competition and Markets Authority.
They predicted this focus would become ever-more concentrated.
Ms Hughes said: "Competition is certainly a word that is appearing more and more in FCA documents and discussions. The FCA has been emphasising its desire to see evidence of competition, especially around promoting good customer outcomes and reducing costs for consumers."
Mr Glessing added: "The FCA aims to improve consumer outcomes through healthy competition in those markets where its considers competition is lacking. We can expect further intervention as its early studies into asset management and platforms take shape and it launches its first phase of remedies-requiring asset managers to enhance fund governance and demonstrate the overall value they offer."
Their comments after recent market studies from the City watchdog which saw a strong emphasis on competition to cleaning up poor practices in the financial services industry.
These include the recent interim report of the platform market study, published in July, and the non-workplace pensions discussion paper and the asset management market study final report.
But neither Ms Hughes nor Mr Glessing were confident having a regulatory body encouraging effective competition was the best way to ensure consumers were being protected or getting the best deal.
Ms Hughes explained: "While more competition would be a driver of consumer protection, the reality is that compliance costs and consolidation are rising hand in hand, and that’s effectively leaving smaller players on the side-lines.
"Consumer protection is not achieved solely via anti-trust measures that look to reduce costs through increased competition and transparency, though the FCA has a clear mandate to intervene given its Competition law powers."
Ms Hughes said it was important not to lose sight of the so-called 'Ronseal' rule of thumb: "Consumer protection is also about products and services saying what they do on the tin, and then doing what they say on the tin, which is not a matter of competition law."
Mr Glessing added: "The $64m question is whether [competition] will work in the way that the FCA intends. Time will tell of course and market study remedies depend heavily on the blend of good governance and effective disclosure that the FCA is driving for.
"No doubt the FCA will be watching with interest to see if consumers do in practice make informed choices based on useful disclosures and the market place enables them to change provider freely and fairly."
The FCA was invited to comment but was unable to do so at the time of going to press. However, a spokesman pointed to the 23-page FCA document, FCA Mission: Our Approach to Competition, published in December last year, which underlines the importance of promoting and policing effective competition in the UK's financial markets.