Nearly all advisers feel left in the dark when it comes to regulator accountability.
New research from Panacea, an online resource for financial professionals, suggests that fewer than 1% of advisers believe they have a proper understanding of what the regulator is accountable for, or how it is accountable.
This is due, said the research, to the FCA’s poor communication with the industry.
Just over 100 advisers were questioned and 60% said they knew little or nothing about what the regulator is held accountable for, with calls from over 90% of advisers for greater communication from the regulator around the issue of accountability.
What’s more, 70% of advisers also said that the accountability of the regulator has not improved at all following the creation of the FCA, despite claims from the new regulator that its four independent panels would help keep it accountable to the industries and markets it regulates.
The research included comments from advisers.
One said: “There must be genuine cost/benefit analysis of each of the FCA ‘commandments’. Minor rule adjustments can cost us a small fortune to implement, with no clear benefit to our clients, or client outcomes.”
Another said: “The FCA comes across as totally faceless to the average IFA. We need a system where individuals or teams at the FCA are regionally allocated to encourage two way communication, where both sides would know who they’re talking to. This would serve two purposes – businesses and advisers would have a point of contact and FCA staff would have responsibility for serving and overseeing the firms allocated to them.”
A third said: “Have a section of a Government department whose role it is to oversee the FCA and who can require it to slim down and reduce its budget. They should be able and willing to identify and take action against the FCA executive when it fails.”
Panacea Adviser Chief Executive Derek Bradley said: “Put bluntly, the FCA has become ‘faceless to advisers’, as one of our survey respondents described it.
“Yes, the Practitioner Panels may have been set up with the intention of encouraging ac-countability but clearly either these are not working effectively or, at the very least, the progress and results of these panels are not being communicated properly to the adviser com-munity. The regulator does report back to the Treasury and Parliament throughout the year but again, advisers appear to feel that this is not enough to truly demonstrate accountability.
“More often than not, the impression that our respondents are left with is that the FCA thinks it is acceptable to simply say it’s accountable, without actually demonstrating this. Clearly this is no longer good enough, particularly when you consider that all the while advisers are expected to fund the Financial Compensation Scheme.”