As someone who has attended numerous FCA Annual Public Meetings (and previously the FSA AGM) over the years, what struck me yesterday at the QEII Centre, Westminster was the number of representatives from firms. It was a point from one of attendees who was a “real” member of the public, who reminded the FCA and the firms attending that they have a duty of care to underlying customers.
Opening remarks from the outgoing chair John Griffith-Jones highlighted conduct as the single most important issue in the last few years. The new individual accountability regime introduced within Banking was referred to as a significant development that showed “conduct is on the map”. Whilst there has been a change in behaviour within the industry, there is still a small minority choosing to behave badly and damage the reputation of others. The FCA still firmly believe prevention is better than cure and enforcement action was still required, with 155 final notices being published relating to firms and 25 against individuals.
FOS received 1.4m enquiries in the last year and 336 disputes were reviewed with just under half being upheld.
Andrew Bailey, CEO talked about the four biggest issues that the FCA faces;
- Brexit – no one should under estimate the amount of work that needs to be completed as part of the Repel legislation
- Continued low interest rates is impacting the pattern of debt and retirement saving
- The aging population and the changes in the career markets where jobs for life don’t exist anymore
- Technological changes having both positive and negative impact of the ability to manage savings and investments
The legacy issues were highlighted and the progress on each was reported (although not to everyone’s satisfaction it would appear once the Q&A session began!) along with the progress against the statutory objectives. This highlighted MiFID II was still full steam ahead along with the extension of the Senior Managers Regime, the consultation for which we were told to expect “very shortly”. To help firms with this transition (referenced again in the Q&A later) there will be regional roadshows.
The following Q&A had the usual “How do you justify paying yourself so much?” question, lots on Brexit including would PSD II be moving forward (response was yes we were not out of Europe yet), would passporting into UK become easier post Brexit (answer was yes we hope so) but there were a couple of real curve balls, to which I think the reaction from the panel was interesting, namely;
Why aren’t you pursuing DFM’s who can’t demonstrate that their suitability procedures are right? (paraphrased)
Did you know there are claims management companies who are being referred to customers who have been mis-sold investment products – by the very people who mis-sold them the investments in the first place? In these instances, the people referring had received commission on the mis-sold investment in the first place and were now getting a referral fee for introducing the customers to the claims management company. (paraphrased)
The second is a very interesting topic as the FCA expects to be regulating claims management firms from April 2019. In both instances the person raising the question was invited to take the specific incidents offline and discuss with representative of the FCA immediately after the meeting.
All in all, a worthwhile event. Roll on 2018 and everything it has in place for the regulatory world.