Copy article

How financial services professionals would fix the FCA

ended 26. November 2024

Britain's financial watchdog, the FCA, has been harshly criticised by an all-party parliamentary group of MPs, with their damning report concluding that: "The FCA is seen as incompetent at best, dishonest at worst.” Newspage asked a selection of financial services experts why they believe the FCA is broken and how it could be fixed. Their views can be found below and will keep appearing until 10:00am.

10 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Mike Staton
Director at Staton Mortgages
If there was ever a definition of "Pot calling Kettle Black", the MPs calling any organisation incompetent and dishonest has to be it. The major fix needed in the mortgage industry is to increase the difficulty to become a Mortgage Advisor. The industry is flooded with "covid" brokers that saw the market boom during the pandemic as an easy chance to earn a few quid. This has resulted in the industry being left with a multitude of unexperienced, poorly equipped, 9-5 brokers. This also includes marketing/coaching "gurus" who claim to be Financial Service Experts with no prior industry experience. The FCA needs to come down hard on people making misleading, false claims. Advertising also needs stricter penalties, with a lot of poor brokerages making false claims on their advertising and still being allowed to trade.
Star Quote
Copy

Editor
Anita Wright
Independent Financial Adviser at Ribble Wealth Management
The FCA has failed to properly regulate financial services for over 20 years. The result of this failure is twofold: financial advisers are wrapped up in red tape, driving up costs, while consumers – the very people the FCA is meant to protect – face greater risks of financial fraud and scams than they did two decades ago. The system of regulation that is not just inefficient but fundamentally broken. What is needed is a complete overhaul of the FCA’s approach. Regulation should focus on reducing unnecessary bureaucracy and cutting costs, which would ultimately benefit consumers by making financial advice more accessible and affordable. Encouraging people to seek financial advice is critical to addressing the UK's massive savings gap. To achieve meaningful reform, the FCA should include professionals with real-world experience – such as current or former bankers and independent financial advisers – who can provide practical insights into the industry's challenges and solutions.
Star Quote
Copy

Editor
Justin Moy
Managing Director at EHF Mortgages
The regulatory process becomes more complex almost every day, with the speed of technology change and AI only adding to its growing list of review areas. The FCA can be more proactive by examining the delivery of advice, particularly through social media, where many unregulated and inexperienced talking heads dominate platforms where followers take action, with alarming financial consequences. The basic principles are okay, but the delivery of advice and financial services needs urgent attention for the FCA to remain credible.
Star Quote
Copy

Editor
Craig Fish
Director at Lodestone Mortgages
The FCA need to focus their attention where it really matters, namely where the public are seeking financial information and guidance, and that is social media. There is a blatant disregard for regulation from unqualified individuals but sadly too many ‘qualified’ advisers are falling foul of the rules and are told to tighten up.
Star Quote
Copy

Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
The FCA needs to focus on the biggest breaches and risks, such as ‘advice’ on social media from unqualified and unregulated people. Most firms feel they are required to jump through more tightening hoops, whilst their timelines on social media platforms are filled with blatant disregard for the regulations without any repercussions.
Star Quote
Copy

Faisal Sheikh
Managing Director at Monmouth Capital
Since starting my own financial advice business I've found that regulation is like sediment: new layers keep being added. Nothing is ever taken away. Simple suggestion. A crack team incentivised to identify unnecessary or counterproductive rules, with the specific goal of a leaner set of more effective regulations. Waiting for this to happen organically is delusional. Quite naturally everyone wants to keep their job so they aren't going to get rid of the work that keeps them employed.
Star Quote
Copy

Patricia McGirr
Founder at Repossession Rescue Network
The FCA is an unholy trinity: ineffective, inefficient and incompetent. It’s hard to justify its continued existence given the level of dissatisfaction and mistrust both the public and the industry have for them. This is the body that, when asked for support by firms under their regime, come out with such classics as: “We don’t provide guidance. You have to read the regulations and interpret them yourself, but if you get it wrong, there will be serious consequences.” Short on transparency and accountability, for the FCA it’s time to start over.
Copy

Editor
Simon Bridgland
Broker at Charwin Private Clients
The reins of regulation need to be snapped on hard and fast to choke the throat of the unregulated finfluencer. Sadly, too many people are happy to take so-called advice from last year’s celebrity bake loving Turkey top racker, who not only have found the fountain of youth, but the next best Bitcoin. It needs to be clear from the start that sound financial advice doesn’t live there, unless from a regulated firm, following the strict guidelines, which they need to make much clearer to firm and networks, the lines are far too open to interpretation.
Copy

Premium
David Belle
Founder and Trader at Fink Money
The regulator's major flaws are that it hasn't made enough noise about rolling back MiFID, because if it did, it would effectively be putting itself out of a job. See this is the real issue with regulators: there is no incentive to actually deregulate because of this labour issue. Where, for instance, research bundling should be permitted, the ever so smart people at the FCA still think it's right to force the sell side not to charge for research as part of trading costs, leading to lower cap companies not being covered, and therefore a worse small cap market. Retail traders looking for leverage now go offshore in the CFD market rather than trading with domestic retail brokerages who are FSCS-registered, meaning rather than being protected for up to £85k if a broker goes under, they can now lose all their money to a Seychelles-domiciled Russian-owned spank shop. The FCA is filled with grads who don't know their arse from their elbow, too. Quote me on that.
Copy

Roger Lane
CEO at Fort Advice Bureau
I completely agree with all aspects of the conclusions of the report even if there are things, not many, that the FCA does that are worth preserving. It is how they go about doing their work that’s broken.
It is too big and covers to diverse a landscape and therefore failing everywhere. Break it up and start again. For example the relatively simple mortgage profession does not need to be subject to a draconian regulator that deals with much more complex fund management in all it guises, yet subjects simpler activities to the same regime. It makes a simple profession suffer an overbearing burden. When we applied to be directly authorised as a mortgage and protection business it took over a year to become authorised despite having been mortgage professionals for over 20 years with an impeccable record. Totally OTT, unrealistic and disheartening, not to mention horrendously expensive. We lost circa twenty advisers because of the wait.
Smaller specialised and focused regulatory units tha