Tough Report Suggests FCA is Incompetent

MPs, as part of an ‘all party’ working group, have suggested that the UK financial regulator, the Financial Conduct Authority (FCA) is not complying with its legal duties.  In its critique, the working group suggests the integrity of the FCA is seen as incompetent and debates took place as to whether the FCA should be replaced or reformed.

The parlimentary group’s report on ‘Investment Fraud and Fairer Financial Services’ is due for release next week but Co-Chair of the All Party Group gave us all a ‘taste’ of what is to come in also suggested that debates took place as to whether the FCA’s immunity from civil liability should be removed i.e., making the FCA and its personnel liable for failures.  The report allegedly covers many areas of failure to protect consumers which is the FCAs statutory (i.e., legal) duty to do so.

It has been suggested by many respondents that appeared before the working group that the FCA is reactive rather than proactive and even “acts in bad faith”.

Comment

This is giong to be a damning report.  We have long said “who regulates the regulator” and why is there no accountability for the failure and incompetence of some of its perosonel.  Not all we hasten to add, there are many FCA staff that are good at what they do but in out opinion, those ‘at the top’ have little understanding of consumers finances and risks of fraaud or other consumer detriment.  How can they?  Many of them have only ever worked in government departments and not in financial services. 

Indeed, in 25 years in business, this firm has never been contacted directly for our views or concerns.  Yes, all financial firms are asked to respond to consultations but this takes time and effort for which many financial businesses simply cannot afford to lose given time needed for regulatory compliance in addition to the regulatory costs burden.  When we contact the FCA for help, we rarely get a ‘straight’ answer and are often told to refer the rulebook.  Not bad for an organisation that we and many others contribue £000s each year for its upkeep.