Adam Phillips of the Financial Services Consumer Panel has called for the new regulator Financial Conduct Authority (FCA) to have a clear vision of its role in providing consumer protection.
He sets out five tests for a successful regulator. These include giving adequate weight to consumer protection; earlier and stronger action and greater transparency; use of effective competition to deliver good consumer outcomes; an assertive FCA capable of challenging the Bank of England; and effective consumer representation across the new regulatory structure.
Adam Phillips says, “The new regulator must have a clearer vision of its role in providing consumer protection. It needs to be more strategic in its approach and to use effective competition as a tool to encourage good behaviour rather than relying on general principles and the threat of sanctions after problems emerge. The FCA should not simply be the FSA in new clothes but must learn the lessons of the last decade and act far more assertively in favour of consumers. We look forward to seeing greater transparency, straightforward products, temporary product bans and the publication of enforcement action taken against misbehaving firms so that consumers can make appropriate choices. There has been a heated debate about whether or not the FCA should be a consumer champion. What is clear is that the FCA must do a better job than the FSA in ensuring consumers are both adequately protected and informed so that they can be more confident they will get a fair deal in accessing financial services. Only with a more effective regulator will consumers begin to trust financial services providers again.”