A trade association has called for a shake-up of the regulatory environment for financial services that allows for more Treasury reviews and scrutiny of the Financial Conduct Authority (FCA).
PIMFA – the trade association for wealth management, investment services and the investment and financial advice industry – welcomed many of the Treasury’s proposed changes in its Financial Services Future Regulation Framework Review.
But PIMFA also set out its own recommendations to achieve an environment with more efficient, agile and forward-thinking regulators.
PIMFA has called for statutory mechanisms that enable the Treasury to order a review of the regulator’s operation, not just in cases of one-off failure, but where it appears the regulator has consistently failed to meet some part of its remit.
The trade association wants a properly resourced sub-committee of the Treasury select committee devoted to scrutinising the work of the regulators and how they use their powers.
PIMFA has called for the FCA to focus on engaging more with industry so that it really understands firms’ businesses and a new statutory objective that requires regulators to take account of the global competitive position of the UK financial services industry.
The trade association has also recommended statutory panels to be fully independent of the FCA so as to guard against regulatory capture and to encourage greater industry engagement.
It also wants the City regulator’s consumer protection objective to be replaced with one that focuses on achieving good outcomes for consumers across the whole of their experience of financial services.
“PIMFA and its members understand that the UK needs a strong regulatory system to protect its status as a leading centre for wealth management and financial advice,” said Tim Fassam, director of government relations and policy at PIMFA.
“However, Brexit provides an opportunity to reshape our current regulatory environment to ensure that it better reflects the needs of UK consumers and firms.
“We want to see a regulator that is effective and uses consistent mechanisms for supervising regulated markets and firms, while also ensuring that bad actors are removed from the industry.
“Changing the regulator’s focus to good outcomes would ensure we avoid the assumption that a customer who has not taken action is protected.
“We hope this would lead to the industry and regulator working together to increase the take up of advice as well as boosting saving and investment.”