This section contains the Centre’s responses to major consultations issued by the Government and regulators.
FCA Mission document
The Financial Inclusion Centre submitted a response to the FCA’s ‘Mission’ document consultation. We are very encouraged that the FCA is consulting on its mission. The document itself is very helpful for communicating the FCA’s priorities and how the FCA approaches its work.
In particular, we are very pleased about the greater emphasis now placed on vulnerable consumers. We support the view that resources should be concentrated on vulnerable consumers who are less able to withstand the impact of market failure or consumer detriment. This is more evidence that the FCA is adopting a more consumer-focused regulatory culture.
But we raised concerns about the FCA’s emphasis on what is known as ‘information asymmetries’ to explain market failure in financial services. There have been numerous attempts to use information disclosure to empower consumers in the hope that this will make markets more competitive, efficient, and firms treat consumers fairly. This has not been effective and the renewed emphasis on information disclosure and competition as a way of making markets work is a regressive step.
For further reading and to download the submission click here: FCA Mission consultation
FCA’s Financial Advice Market Review (FAMR) call for input
We welcomed the call for input into the so-called ‘financial advice gap’ in the UK – concerns that large numbers of consumers are unable (or unwilling) to access good quality, appropriate financial advice. Good advice is critical for promoting financial inclusion, financial resilience and security amongst households – particularly lower-medium income households which are the focus of our work at the Centre. But, it is important that we understand the real causes of the advice gap. Claims that over-regulation is the primary cause of the advice gap are wrong or disingenuous and used to try to reduce much needed consumer protection. Remedies based on false analysis would exacerbate rather than improve the situation.
For further reading and to download the response click here: FCA FAMR consultation
Reforming Financial Markets
The Financial Inclusion Centre submitted its response to HM Treasury’s important consultation on reforming financial markets. The Centre argues that the priorities for government intervention and financial market reforms should be to reform financial markets… Read More/Download Response
Ensuring access to a basic bank
A response to the European Commission’s consultation on how to ensure European Union citizens have access to a basic bank account… Read More/Download Response
A Review of Retail Distribution
Response to the FSA’s proposals to reform the distribution system for retail investment and pension products… Read More/Download Response
Banking Reform – Protecting Consumers
Response to the discussion paper issued by HM Treasury, the Financial Services Authority, and the Bank of England on reforming the deposit protection scheme in light of the Northern Rock scandal… Read More/Download Response