The Financial Conduct Authority must be careful not to “oversimplify” its rulebook following the introduction of Consumer Duty rules, consultancy Capco has warned.
Managing principal Michael Shand said that relying too heavily on high-level guidance could lead to ambiguity, as firms might interpret their conduct obligations differently.
“Before removing too many rules, the FCA should assess firms’ maturity in embedding the Consumer Duty into their culture, recognising the many differences across firms and sectors,” he said.
In July, the regulator announced plans to reduce some of the burden on financial services firms.
It invited firms across the profession to identify rules that could be removed or simplified if they overlap with the Consumer Duty.
Its call for input closes on Thursday (31 October).
The proposed simplification of the rulebook has received a largely positive response.
Many have said it will give firms a clearer focus on improving consumer outcomes and reducing costs.
Aegon pensions director Steven Cameron said: “We see scope to simplify rules around product disclosure and illustrations, to allow firms to design communications that truly help improve customer understanding and engagement.”
He said consumers could also benefit if the FCA rules made it easier to move from paper-based to digital communications, which can be “more engaging” and allow firms to track actions taken by consumers to deliver better outcomes.
“Ironically, the consultation around the Value for Money Framework for workplace pensions that closed earlier this month includes particularly prescriptive rules, which we hope will be simplified before going live,” he added.
“Looking ahead, we hope the willingness to rely more on outcomes-based regulation rather than prescription will shape the FCA’s approach to solutions flowing from the Advice Guidance Boundary Review, including targeted support.
“Overall, however, the call for input may be a little premature to reach firm conclusions.
“While we know the Labour government were keen for the FCA to consult, certain aspects of the Consumer Duty only came into force in July and it may take more time to fully assess scope for simplification within an evolving regulatory approach.”
A call for input is an encouraging approach. Listening to practitioners before issuing a consultation rather than afterwards has to be positive.
Quite the opposite methinks Mr Shand of Capco …..
The FCA rulebook is long due simplification as in its current guise, not fit for purpose …I would say the whole thing needs burning on top of a hill for all to view !!
But then, should this be the case …. your business need, would be null and void, so I get the self preservation in your words, albeit strongly disagree.
You have to see, if the rules and guidance are so complicated and un-workable that the average man, woman, it, that, or frying pan fail to understand and adhere too, without the need for a company like yours to subscribe many pounds too, then its a crock…
Partly the reason why advice is so expensive and the preserve of the rich
The 10 commandments… good
The 100,000,000 commandments… bad
K.I.S.S. xx
Please remember ..
Those weighed down and unable to function from rules and law, have no option but evade them !!
Do you offer those who subscribe to your services a commitment to pay 20% of their FSCS invoice ?
As Alexandre Dumas wrote, all for one, one for all.
Maybe a ‘vested interest’?
Shandy lad,
The Financial Conduct Authority must be careful not to “oversimplify” its rulebook following the introduction of Consumer Duty rules, consultancy Capco has warned.
Not a cat in hells name this happening they make the rulebook and law unto themselves
More engaging regulation sounds like a dream!!!