With just over a year to go before the successor bodies to the FSA take over, Martin who is also CEO designate of the Financial Conduct Authority, told a British Bankers’ Association audience that it was time for a new approach to get the right outcomes for consumers.
He said: “We need to develop a new orthodoxy and a new regulatory approach… I want the culture in your firms, from your product governance to your sales, to be aligned with the best interests of your customers. I don’t want to see any of the failings the FSA has had to deal with in the last few years.”
He continued: “But I want to emphasise this is not all about regulated firms. Consumers of course have a role to play, and we need a cultural change at the regulator as well.
“The FCA will need to ask tougher questions, and they need to be the right ones, if we are really going to discover what lies at the heart of your firms’ successes and failures. The FCA then needs to make better, bolder, faster decisions.”
He told the audience that “we all have to walk in the footsteps of your customers” to understand their perspective and to be able to deliver the new approach.
Wheatley said the FCA will build on the experience of the FSA but will aim to strike a balance recognising that firms, the regulator and the consumer all have a responsibility.
“If a consumer makes a fully informed decision that subsequently goes wrong, then that is down to them,” he said. “But we have to be realistic. And what this is about is balance.
“We have to realise that consumers aren’t always in a position to take responsibility, because of their lack of financial knowledge and because we have to take a reasonable approach to what a normal person can understand about complicated products and risks.
“And so I believe that balance comes from all parties – consumers, providers, intermediaries – taking responsibility for their part in each transaction. So our approach will reflect that and be flexible and proportionate.
“But what the FCA won’t be doing is lying back then letting the market get on with it and expecting clear disclosure and a mandated sales process to do its job.”
