TISA comments on the close of the latest FCA consultation on the new Consumer Duty
Lisa Laybourn, Head of Technical Policy and Regulation, at The Investing and Saving Alliance commented on the close of the latest FCA consultation on the new Consumer Duty:
“TISA welcomes all efforts to improve consumer protection in retail financial markets. Consumer-friendly regulatory measures are needed to drive a healthy and successful financial services system in which firms can thrive and consumers can make informed choices about products and services. We support the FCAs ambition that the Consumer Duty will help make competition work more effectively, driving up quality and putting consumer at the heart of their business.
“TISA is concerned, however, the changes required in practice are significant and through the consultation process are proposing timescales that it believes will enable a considered and effective implementation. The FCA will need to ensure that the cost of change for firms does not fall on the consumer, result in raising barriers to market entry or disproportionate costs on smaller firms.
“A second concern we share with the industry is clarity, both when it comes to the extent of regulatory responsibility across the distribution chain and some of the terms of the new consumer duty. Guidelines around broad concepts such as ‘reasonableness’, ‘good faith’ and legal ones including ‘cause’, ‘foreseeable’ and ‘outcomes’ will need to be clear, tight and transparent, with a common understanding across the financial services ecosystem including the Financial Ombudsman Service.
“Where firms provide products which span across the remit of more than one regulator, such as the FCA and The Pensions Regulator, a joined-up approach or regulatory college is needed. This would help to ensure the same protection for consumers, irrespective of the regulator of the product.
“We are also concerned that without solving the advice-guidance boundary issues for firms, they will be limited in the contribution they can make in helping consumers achieve their financial aims. The introduction of the new Consumer Duty proposals could lead to conservatism among providers as they prioritise avoiding consumer harm over good outcomes, which could inadvertently create more financial exclusion.
“The new consumer duty is an opportunity to improve consumer outcomes, but a number of concerns need to be addressed beforehand so we can achieve that worthy aim.”
Contact:
Kuba Stawiski
Cicero/AMO
07856031906
kuba.stawiski@cicero-group.com
Notes for Editors
07856031906
The Investing and Saving Alliance (TISA) is a unique, rapidly growing membership organisation for UK financial services.
Our ambition is to improve the financial wellbeing of all UK consumers. We do this by focusing the convening the power of our broad industry membership base around the key issues to deliver practical solutionsand devise innovative, evidence-based strategic proposals for government, policy makers and regulators that address major consumer issues.
TISA membership is representative of all sectors of the financial services industry. We have over 200-member firms involved in the supply and distribution of savings, investment products and associated services, including the UK’s major investment managers, retail banks, online platforms, insurance companies, pension providers, distributors, building societies, wealth managers, third party administrators, Fintech businesses, financial consultants, financial advisers, industry infrastructure providers and stockbrokers.
As consumers, the financial services industry and the economy react to and recover from the effects of the pandemic, the importance of the three key pillars of work that TISA prioritises has never been more apparent:
- Strategic policy initiatives that influence policymakers regarding the financial wellbeing of UK consumers & thereby enhancing the environment within which the industry operates in the key areas of consumer guidance, retirement planning, later lifetime lending, vulnerable customers, financial education, savings and investments.
- TISA is recognised for the expert technical support provided to members on a range of operational and regulatory issues targeted at improving infrastructure and processes, establishing standards of good practice and the interpretation and implementation of new rules and regulations covering MiFID II, CASS, ESG/RSI, operational resilience, Cyber Risk, SM&CR and a range of other areas.
- Digital transformation initiatives that are driving ground-breaking innovation and the development of industry infrastructure for greater operational effectiveness and revenue promoting opportunity for firms. TISA has become a major industry delivery organisation for consumer focused, digital industry infrastructure initiatives – TISAtech (a digital marketplace that brings together financial institutions and FinTechs for greater collaboration and innovation) and TURN (TISA Universal Reporting Network – a digital platform providing a secure data exchange for financial services using blockchain technology) – alongside projects Digital ID and Open Savings & Investment. This reflects TISA’s commitment to open standards and independent governance.