FCA unveils new business priorities

The FCA has announced a new set of business priorities for the year ahead which focus on the challenges presented by the coronavirus pandemic.

The regulator said it would immediately focus on ensuring that financial services businesses give people the support they need, that people avoid scams, and that financial services businesses and markets know what is expected of them.

Looking ahead to the medium-term, the new business plan also set out several priority areas where the FCA would address continuing harm – with the regulator suggesting it aimed to ensure customers can rely on safe and accessible payments to receive their pay or benefits, settle bills or access cash.

The FCA also indicated it would ensure customers do not get into unaffordable debt but would be treated well if they do, and that customers will be able to make effective investment decisions about their savings, rather than be exposed to risky or poor value products.

FCA interim chief executive, Chris Woolard, said that coronavirus had “altered the UK’s financial landscape dramatically” in a matter of weeks.

“At times like this it is more important than ever that the FCA leads the way on the protection of consumers, firms and the markets,” Woolard said. “Our business plan recognises the impact of coronavirus on the financial services industry, while looking forward at how we transform the FCA’s operations in future.”

Commenting on the regulator’s latest proposals, Aegon pensions director, Steven Cameron, welcomed the update and stated: “Rightly, the FCA  has changed its immediate priorities and plans for the coming year to rise to the challenges posed by the coronavirus crisis.

“We support its short-term focus on protecting the vulnerable, tackling scams, ensuring fair customer treatment, keeping markets working well and mitigating the impact on consumers where firms fail.
“The business plan also gives an insight into medium priorities for the next one to three years including ensuring consumers can make effective investment decisions about their savings. This includes members of defined contribution pensions and those accessing pension freedoms and there’s an encouraging reference to the importance of advice and ensuring consumers have access to it.
“The business plan also gives a further indication that in the medium term, and once the UK has left the EU, that the FCA intends to focus more on principles and outcomes, than rules and process. This creates opportunities to identify when prescriptive rules get in the way of good customer outcomes.”

However, group communications director at Just Group, Stephen Lowe, suggested the FCA had “misgivings” about whether they were improving financial services markets.

“Yesterday marked the fifth anniversary of the pension changes that extended flexibility of income drawdown to the mass market,” Lowe said. “The reforms are popular but the FCA clearly has misgivings about whether they are delivering better outcomes for all.
“It is particularly concerned about consumers being exposed to more investment risk than they expected or can absorb, and that the decision-making support available is not working well enough.
“Although the reforms have put more responsibility on individuals, the regulator is determined to impose high standards to ensure firms act in consumers’ interests. We can expect scrutiny of retirement advice to ratchet up in the coming months.
“It is unfortunate that some of the important work needed to build further safeguards for people who don’t receive regulated advice – such as the introduction of investment pathways that was due this summer – may be delayed due to the impact of the coronavirus epidemic.”

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