Financial Conduct Authority  

What the advice industry wants from new FCA boss Rathi

What the advice industry wants from new FCA boss Rathi

The advice industry has welcomed the news Nikhil Rathi is set to become the next chief executive of the Financial Conduct Authority in the hope he will "steer a steady course" for the sector. 

The London Stock Exchange boss is expected to take up the helm at the regulator in October, at a critical time for the financial services industry in the aftermath of the coronavirus crisis.

The arrival of Mr Rathi at the City watchdog has been well received within the advice sector, but Neil Moles, chief executive of advice firm Progeny, said he looked for stability for advisers and their clients in the future regulator. 

Mr Moles said: "The FCA will have an important role to play in implementing strategies for developing sustainable economic growth and it is reassuring that they will be in good hands.

"In these uncertain times for the industry, advisers and their clients, the new chief executive's clear priorities must be to steer a steady course through the months and years ahead."

The Personal Investment Management & Financial Advice Association warned the new boss faced "many competing priorities". 

Liz Field, chief executive of the trade body, said the new leadership came at a time of "significant change" for the industry. 

She said: "Nikhil Rathi is an extremely knowledgeable and experienced leader, as his successful stewardship of the London Stock Exchange as its chief executive for the past six years demonstrates.

"His knowledge of the wealth management and financial advice sector, as well as prior experience of working within government, leading on the UK's European Union and international financial services interests, will be particularly welcome at a time when we are renegotiating our relationship with Europe and striving to form new relationships with international partners.

"We look forward to having a productive and constructive working relationship with him and wish him well in his new role."

Earlier this year Pimfa called on the FCA  to "carefully consider" whether its regime is fit for purpose amid "totally unsustainable" regulatory and compensation costs faced by its members. 

Oxford-educated Mr Rathi joined the London Stock Exchange in 2014 after 11 years at HM Treasury, during which time he served as private secretary to prime ministers Tony Blair and Gordon Brown between 2005 to 2008. 

Mr Rathi was director of the financial services group at the Treasury where he led international legislative negotiations in the EU. Before that he was head of the financial stability unit during the 2008 financial crisis. 

The issue of compensation costs for investment and pension advice has been an area of increasing contention this year and Keith Richards, chief executive of the Personal Finance Society, called on the new FCA chief executive to provide clarity on the subject. 

Mr Richards said: "The regulator needs to re-visit the current system of professional indemnity insurance and FSCS levies which are no longer fit for purpose, since it ultimate increases the cost of regulated advice, increases financial risk and ultimately reduces access to advice for consumers by increasing volatility for advisers.