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New Velvet Glove, Same Old Iron Fist

Okay, we admit it. For a short while earlier this year, we were wondering whether the last man working at the Financial Conduct Authority’s publications department would be kind enough to turn out the lights before he nodded off to sleep? How wrong we were.


 

Those readers who consult our regular FCA Publications listing could have been forgiven for wondering what was going on? From Marchiron fist to June of this year, the regulator had seemingly abandoned the whole mammoth task of issuing the usual stream of updates, consultations, discussions about consultations, discussions about discussions and everything else, in an apparently all-out drive for a soft-touch consumer-friendly approach instead. Indeed, hadn’t CEO Martin Wheatley explicitly said at the FCA’s inauguration in April 2013 that the more rules there were, the less the public understood them?

So, for a while, you might have noticed that our FCA Publications pages featured press releases, consumer videos, court judgements and an endless stream of something called Thematic Reviews. All very woolly. But the last two months have released such a pent-up flood of ‘proper’ FCA publications that we’re almost wishing we’d kept our mouths shut. We’d counted 20 major new announcements by mid-August, and there have been plenty more since. Sipps, social media, mortgages, banking accountability, ISAs, price comparison websites….

Talking To Consumers

What’s going on? To some extent, the unseasonal tidal wave from the FCA will have been due to the lengthy lead-times that the transition from the old FSA had necessitated – to put it simply, the regulator has needed this long to get its own consultative processes working well. But it’s also because of the FCA’s new powers with regard to consumer lending – payday lenders and the like – and because of the heavy burden of redefinitions resulting from next April’s pension changes. Not to mention Brussels’s own inner workings, many of which have to be translated into national law over here.

What’s coming through, though, is that Martin Wheatley is proving himself to be an adept communicator, with an eye for a camera and an ear for a soundbite. The public have good reason to be appreciative of his genuine concern for consumers – and we’re not hearing too many complaints on that score here at IFA Magazine.

That Old Right Hook

But that’s not to say that the iron fist isn’t still there. Just that it’s becoming harder for advisers to tell where it is until it actually lands a blow. Take, for example, the FCA’s declaration that it will henceforth feel able to publish the names of suspected wrongdoers as soon as proceedings against them are opened – and not, as previously, only when they’ve been fined. The regulator has sensibly stepped back a little from its original position on naming and shaming – but the flood of new consumer warnings are clearly telling advisers not to push their luck, or else…

At the same time, as Compliance Doctor Lee Werrell pointed out in June, the regulator is toughening up on affirmations by directors and SIFs in ways that will catch many advisers out. By attaching much more importance to so-called attestations, he said:

The regulator is currently laying the ground for pursuing far more cases against executives individually as well as collectively – possibly leading to obtaining fines and criminal prosecutions.

“This means a far greater concentration on personal accountability resulting from legal affirmations – and it’s something that needs to be treated seriously by all senior executives who are being required to sign on the dotted line – and thereby, to stake their professional reputations and their personal authority on the quality of their firm’s compliance processes.

You can read Lee’s article on the IFA Magazine website at http://tinyurl.com/ofxpceg

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