The Financial Conduct Authority chief executive has said the Consumer Duty and the advice guidance boundary review will be its priority for the next 12 months.
Nikhil Rathi has set out the FCA’s business plan for the financial year 2024-2025. The plan, which was published today (19 March), is the final year of the FCA’S three-year strategy (2022-2025), first unveiled in 2022.
The regulator earmarked 13 commitments in its strategy, which focuses on preventing serious harm, setting higher standards and promoting competition.
Rathi outlined the specific issues the regulator will prioritise, including protecting consumers by testing if firms are meeting the high standards set by the Consumer Duty, supporting people’s long-term financial wellbeing through the Advice Guidance Boundary Review, and making sure pension products deliver value for money.
Other priorities include contributing to UK competitiveness and growth by improving the attractiveness and reach of UK wholesale markets, supporting firms to invest, innovating and expanding through its innovation services, and continuing to make it quicker and easier for firms to apply for authorisation.
The FCA aims to build on the progress already made to become a world-class data-led regulator by automating more of its analytics tools to help it detect and respond to consumer harms faster, and working with firms on the safe deployment of artificial intelligence.
Rathi said: “We’ve already made significant progress in delivering against the bold vision we set out in our strategy two years ago, including the game-changing introduction of the Consumer Duty and proposing the most far-reaching reforms to wholesale market regulation and the listing regime in decades.
“We remain resolute in supporting the vital role the financial sector plays in the UK’s long-term economic growth, embracing the potential benefits that technology presents both for us and the firms we regulate, while also continuing to protect consumers and ensure market integrity.”
The FCA boss said the planned programme of work builds on the progress made over recent years to become a “more outcomes-based, assertive and data-led” regulator.
He added that the introduction of the Consumer Duty, which came into force last July, marked a major shift by setting higher and clearer standards of consumer protection. It has already led to firms making changes to savings rates and fees.
Rathi said the FCA is making better use of data to spot and stop harm faster, and is being tougher on the firms that could cause harm.
The regulator said it has removed over 10,000 potentially misleading adverts in 2023 and sent out 2,243 warnings about unauthorised firms and individuals.
It also more than doubled the number of firm permissions cancelled, compared to the previous year, for failing to meet its minimum standards.
The FCA outlined some of the challenges for the year ahead, which include higher interest rates and persistent inflation, global financial and geopolitical risks.
The FCA and its assorted precursors have had 36 years to get their act together to prevent serious harm, yet in all that time you’ve failed dismally. Why should we believe you when you claim that this time it’s going to be any different? Gathering ever more boatloads of data ain’t gonna do it unless you devise some sort of methodology to identify, extract and actually act on those elements that indicate potentially dangerous practices.
I see no mention of a Whistle Blowers’ Charter either ~ have you decided to ignore this idea or is it just that you can’t be bothered with something that would place the FCA under an obligation to actually DO SOMETHING instead of forever requiring others to?
What about Provider service levels and Advisers being called Customers / Clients instead of Brokers / Intermediaries or worse yet, ‘Reps’.
It is about time that the values of advisers and the FCA were announced loud and clear in order to develop more trust in the Financial Services space!