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Apfa calls on FCA to consider impact of regulation

by Jun Merrett on Dec 14, 2012 at 11:07

Apfa calls on FCA to consider impact of regulation

The Association of Professional Financial Advisers (Apfa) has called on the incoming Financial Conduct Authority (FCA) to impose more market focused regulation.

In its response to the Financial Services Authority's (FSA) consultation paper 'Journey to the FCA', the trade body said the FSA had not paid enough attention to the effects of its regulation on the industry or consumers.

Chris Hannant (pictured), policy director at Apfa said: 'Apfa believe the competition objective for the FCA should lead to it taking a more market oriented approach. In the past too little regard has been paid to the cumulative effect of regulation on both consumer outcomes and the profession as a whole.

'It is incumbent upon the FCA to ensure that we have a regulatory regime that, whilst protecting the consumer, leaves room for one of the UK’s most successful industries to grow and prosper.'

Apfa also said the FCA needed to succeed where the FSA had failed and manage the balance between confidentiality and transparency, including in its dealings with Capita for Arch Cru.

The FSA censured but did not impose a £4 million fine on Capita for its failings in relation to the Arch Cru funds. Although Capita contributed to the £54 million payout alongside BNY Mellon and HSBC, the FSA still has not published the reasons why it believes the amount to be fair.

'The Arch Cru settlement with Capita and others is a prime example of the regulator making decisions that have a significant impact on the market but with little transparency. The FCA must do better in this regard and be willing to disclose more details of these decisions,' Hannant said.

The trade body also called for clear exoneration for firms who are issued with warning notices only for the FSA to find no evidence of wrongdoing.

Hannant said: 'In two-thirds of cases potential enforcement is not publicly concluded, which can result in firms bearing an inaccurate ongoing slur against them. The FCA should introduce a clear process that will make it explicit that firms are exonerated when it is concluded that no wrongdoing has taken place following a warning notice.'

6 comments so far. Why not have your say?


Dec 14, 2012 at 12:33

Who are APFA? is this a new trade body?


I think we are going to rebrand to "mile high services" as part of our post RDR service offering.


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Julian Stevens

Dec 14, 2012 at 12:45

The things for which APFA are calling are reasonable enough, but the question is whether or not the FCA is taking any notice.

Is the FCA prepared to grant APFA regular audiences to hear and to discuss its concerns? And, if so, does the FCA respond constructively to those concerns?

Or is it still just a matter of smiling and waving?

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Alan Lakey

Dec 14, 2012 at 13:47

Up till now we have had a regulator stumbling around like a blind man at Hampton Court Maze.

The practical difficulties, substantial cost and unintended impact of their many, many policies has led them to be a laughing stock, not the world class regulator posited by Gordon Brown.

In short, they can come up with any ideas they wish regardless of the stupidity quotient and despite the warnings of practitioners. This dictatorial attitude is compunded by the total absence of any checks and balances resulting in our human rights being disturbed and ignored at almost every turn.

Let us hoper that Martin Wheatley can whip the organisation into some kind of shape. Forget the shoot first attitude and Linda Woodall's belief that tension between the regulator and the regulated is a good thing. It's not.

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Charles Rickards

Dec 14, 2012 at 15:36

Consideration of impact does seem to have been somewhat lacking! I will now wait with baited breath to see if the FCA under Martin Wheatley will become beneficial to all aspects of financial services.

Respect between all parties is required for an honest and ultimately successful market.

The errors and wrong doings of the past are history and can only be used to help avoid future issues ifthere is a will to work together to build a strong sector that looks after consumers and product/service providers, as all are essential.

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Green Eyed Monster

Dec 14, 2012 at 16:18

@ Charles,

Yes but the FSA had eyes only for the consumer.

It did not give a stuff about the industry or the profession.

It did not care how much upheaval it caused, cost, inconvenience or removal of human rights it took away. It saw itself as the big stick battering us into providing better service for the consumer. The government (especially the Hobo) backed them up without question. There is no body speaking to the government on our behalf seeking a balanced approach, explaining that the industry and the profession need to prosper and work under conditions conducive to attracting good people in order to ultimately provide good consumer outcomes. It is not a one way street. Let hope Mr Wheatley appreciates that.

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Julian Stevens

Dec 17, 2012 at 11:19

On the way to work this morning (following a trip to the dentist) I noticed an Avon Fire & Rescue van parked by the kerb. On its side were printed the following words: Preventing, Protecting, Responding.

Maybe a good mantra for the FCA, given how badly its predecessor has failed in all three of those departments.

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