FCA challenged to do more to support professionalism in UK financial services

FCA challenged to do more to support professionalism in UK financial services

A financial services Alliance with a combined global membership of 200,000 has announced that it is challenging UK’s Financial Conduct Authority (FCA) to do more to support professionalism in UK financial services.

The Chartered Body Alliance, which is composed of the Chartered Insurance Institute, the Chartered Institute for Securities & Investment and the Chartered Banker Institute have sent an open letter to FCA CEO Andrew Bailey in response to its published 2018-2019 Business Plan.

The Alliance urges the FCA to seriously increase its engagement rate with professional bodies, which, it says, are obvious partners to help the regulator achieve consumer trust in the UK sector and set a model for others around the world.

In its letter the Alliance positions itself to the FCA as a “third force” on the financial services horizon (not regulatory, nor organisational), focusing on delivering cultural change across the profession. The Alliance urges the regulator to therefore offer more support for the work of professional bodies, particularly in the areas of improving culture.

The Alliance emphasises the role of the individual as the “cornerstone” of the Senior Managers and Certification Regime (SMCR) and that therefore this aspect can be effectively reinforced by professional bodies.

Simon Culhane, Chartered FCSI and CISI CEO said:

We stress to the regulator and the public at large the benefits to be obtained from engaging 200,000 professional body members, who are in positions of influence throughout the profession.

Simon Thompson, CEO of the Chartered Banker Institute raises in the letter that in this age of Open Banking, Fintech and Roboadvice, which will increase the choices available to customers, individuals working in financial services with core skills, coupled with a professional mind set will still be required to make sense of, and help customers take advantage of, new technology:

As the professional bodies representing over 200,000 individuals we have a key role to play in helping current members and future generations develop the knowledge and skills required to work with technology to support customers. As such it is important that regulators recognise and more publicly acknowledge this role, our work and the personal commitment of our members and those achieving our professional standards.

The Alliance comments on the FCA’s Treatment of Existing Customers plans, highlighting how its own research shows consumers ability to take reasonable responsibility is enhanced where they are engaged with qualified and knowledgeable professional staff. Challenging the FCA to offer more support for its initiatives which are under way to develop and improve measures of consumer trust and confidence, the Alliance notes that “those adhering to our codes of conduct not only exceed regulatory requirements but do so in a way that addresses the spirit as well as the letter of the rules.”

Sian Fisher, CEO, Chartered Insurance Institute commented:

It is rare that anyone wakes up in the morning determined to do the wrong thing, yet that is where we sometimes find ourselves. Behavioural economics shows that as human beings we have an unconscious bias to preferring the status quo over changing things. So in a competitive market that can all too easily translate into the keenest deals going to new customers. But we all know that unequal treatment, especially if it seems totally illogical, breeds distrust in the long run. Working with the Regulator we need to find ways to ensure that competition for customers can revolve around quality of service, good value and partnership, rather than only headline cost. If not, we will continue distortion to price to the detriment of customers and the Profession alike.

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