In an open letter to the chancellor of the exchequer, director general of APFA, Chris Hannant, called for the Government to implement changes to improve the accountability of the Financial Conduct Authority.
He also said it was unclear why advisory firms were not included in the Government’s ‘Better Regulation’ initiative, which is meant to boost growth by lifting the regulatory burden, therefore making it easier for companies to do business.
“We understand that regulatory action was required in the wake of the financial crash, however, the financial advice sector is struggling under the current regulatory burden and with a regulator that appears unable to abide by the same budgetary principles it applies to those it regulates.”
APFA – which represents the UK professional financial advice industry – hopes chancellor George Osborne will take heed of its request and embed new principles in financial services as part of his emergency Budget on 8 July.
Very concerned
The association said it remains “very concerned” about the “sheer volume” of existing rules and regulations financial advisers have to comply with, particularly as this adds to the cost of running an advice firm.
“This not only means higher fees for consumers, but also acts as a barrier to consumers engaging with their finances because of, for instance, the amount of paperwork that has to be completed,” Hannant said.
“Considering the recent changes to the pensions and savings landscape, anything that discourages consumers from access to professional financial help should be of the utmost concern to the government.”
Three steps
APFA asked Osborne to consider three steps:
- To ensure the FCA recognises how its policies impact on the economic growth of the financial services industry to avoid the pitfalls of the body’s predecessor Financial Services Authority, which APFA said “developed policies in isolation”.
- To cut existing regulation and regularly reviewing and updating the FCA handbook: “We would recommend an initial target of reducing the Handbook by a third in length over three years,” it said.
- Implementing a new performance scorecard which is accessible to external stakeholders and enables the government and the industry to have a clear picture of how the FCA is meeting is obligations.
