What the FCA Means to You

The Financial Services Authority (FSA), the previous government’s banking regulator, has been broken into pieces and replaced with two new Authorities. While the Prudential Regulation Authority (PRA) will specialise in the stability of financial services firms, the Financial Conduct Authority (FCA) will now directly supervise the financial services sector. The FCA “will operate with the single strategic objective of protecting and enhancing (consumer) confidence in the UK financial system.”[1]

You can rest assured that that your financial planner is a financial expert whom you can trust and is overseen at all times by the FCA. According to their website, the FCA will be supervising 26,000 firms and “regulate firms to ensure high standards of conduct and the financial services industry remains stable.”[2] A regulated firm “must conduct its business with integrity, due skill, care and diligence.”[3] Financial planners will have to act to the highest standard. Only highly qualified and ethical individuals will be allowed to practice financial planning. Individuals and businesses can use financial planners with the utmost trust and confidence knowing that the conduct of the financial planners is being constantly watched by the FCA.

The FCA will regulate the financial products as well as the financial services. The FCA seek to prevent financial scams like the mis-selling of payment protection insurance (PPI) several years ago, which has led to so much litigation. Martin Wheatley, chief of the new FCA has said, "What’s new is that we won’t just be relying on regulatory reports back from firms, but on reports from consumer bodies, internet monitoring, the media and even on Twitter.”[4] PPI has cost the banking industry over £12bn in claims. The previous regulatory body, the FSA, allowed PPI to be sold unchecked for years while they conducted reviews of its sale. The FCA has pledged to shut down the sale of bad products quickly while they conduct any necessary reviews of the products.

The creation of the FCA means that individuals and businesses are better protected in the financial sector. First, it means that the individuals and firms acting on behalf of citizens are honest and expert. Second, it means that fraudulent financial products will not survive long on the British markets. In conclusion, the creation of the FCA makes the use of a financial planner one of the smartest and most secure decisions you can make in life.

[1]A New Approach to Financial Regulation: Building a Stronger System By Great Britain: H.M. Treasury, p. 59. [2]www.fca.org.uk [3]www.Fshandbook.info/FS/html/FCA/PRIN/2/1 [4]http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9958341/Financial-Conduct-Authority-chief-Martin-Wheatley-will-use-Twitter-to-spot-companies-illegal-activities.html

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Mike Robertson Associates Limited is an appointed representative of Lighthouse Advisory Services Limited, which is authorised and regulated by The Financial Conduct Authority. Registered in England.