PIMFA has called upon the government to reshape the financial services regulatory environment in a post-Brexit landscape.
In response to the government’s Financial Services Future Regulation Framework Review, the trade association said there is a “clear opportunity” to create a regulatory architecture that improves supervision and enforcement and leads to better outcomes for consumers.
PIMFA said it welcomes many of the changes proposed by the government but has made its own wide-ranging set of recommendations that it believes would lead to a more efficient, agile and forward-thinking regulatory environment.
It has called on the government to replace the FCA’s consumer protection objective with one that focuses on achieving good outcomes for consumers across the whole of their experience of financial services and focus on engaging more with industry so it really understands firms’ businesses.
In addition, PIMFA would like to see statutory mechanisms that enable HM Treasury to order a review of the regulator’s operation, not just in cases of one-off failure but where it appears the regulator has “consistently failed to meet some part of its remit.”
Furthermore, the association believes the industry would benefit from a properly resourced sub-committee of the Treasury Select Committee devoted to scrutinising the work of the regulators and how they use their powers.
PIMFA would also like to see a new statutory objective that requires regulators to take account of the global competitive position of the UK financial services industry and statutory panels to be fully independent of the FCA to guard against regulatory capture and encourage greater industry engagement.
Tim Fassam, director of government relations and policy, PIMFA, said: “PIMFA and its members understand that the UK needs a strong regulatory system to protect its status as a leading centre for wealth management and financial advice. However, Brexit provides an opportunity to reshape our current regulatory environment to ensure that it better reflects the needs of UK consumers and firms.
“We want to see a regulator that is effective and uses consistent mechanisms for supervising regulated markets and firms, while also ensuring that bad actors are removed from the industry. Changing the regulator’s focus to good outcomes would ensure we avoid the assumption that a customer who has not taken action is protected. We hope this would lead to the industry and regulator working together to increase the take up of advice as well as boosting saving and investment.”