The Complaints Commissioner has highlighted a "lack of effective prompt action" by the financial regulator in a number of cases in which advisers and consumers reported concerns about a firm or fund.
In a complaint published last month the commissioner also expressed concerns the Financial Conduct Authority had failed to "learn lessons" from previous cases in which the regulator's customer contact centre had neglected to pass on information of a "supervisory" interest.
In the complaint, which was upheld by the Complaints Commissioner, an oversees financial adviser tried to alert the regulator to concerns regarding a company which has since been declared in default by the Financial Services Compensation Scheme.
The adviser told the regulator he was aware of "significant losses" in inappropriate investments made on behalf of UK expatriates.
He had attempted to raise the concerns via the FCA's whistleblowing team in February 2016 but was instead referred to the regulator's customer contact centre.
Unsatisfied with the regulator's handling of his concerns, and his subsequent complaint, the adviser escalated the issue to the Complaints Commissioner, who found the FCA's supervision of the firm in question was "inadequate and lacked strategic oversight".
Antony Townsend said information and intelligence received about the firm from consumers, advisers and the Financial Ombudsman Service were "not co-ordinated in a way that might have supported more robust regulatory action", leading to some matters being overlooked or not followed up "when clearly they should have been".
Mr Townsend said he had seen confidential material which showed the FCA did not ignore information it was receiving and did on occasion take active steps to supervise the firm in question, but concluded the supervision was inadequate because multiple concerns from reputable sources had resulted in "little effective action" and in some instances internal teams did not pass on relevant information.
The commissioner also found there were no records to show why some regulatory actions, including supervisory visits, were not taken or were not followed up.
Mr Townsend said he continued to see a number of cases where IFAs and consumers reported concerns about a firm or fund to the FCA, sometimes over several years, but where a "mismatch" existed between stakeholder's expectations and the "perceived actions" of the regulator.
He said the reason for this could be the confidential environment in which the FCA operates, meaning complainants may not be aware of any action taken by the regulator.
But Mr Townsend added: "The FCA's confidentiality regime must not be used as a screen to avoid proper scrutiny and reflection or, where appropriate, admission of clear failings."
According to the commissioner's report, the FCA's supervision team agreed its supervision of the firm in question had not been done well and said it had already taken steps to train contact centre staff on how to prioritise the information they receive.
The FCA stated it was confident the supervisory issues seen in older cases were "less likely to be repeated", with the commissioner recommending the customer contact centre be given more resources.