At the beginning of April, the FCA published its business plan for 2016/17. The business plan sets out the FCA’s work programme for 2016/17 and its priorities for the coming year. The priorities for 2016/17 are stated as:
- Financial crime and Anti-Money Laundering
- Wholesale financial markets
- Innovation and technology
- Firms’ culture and governance
- Treatment of existing customers.
The foreword by John Griffith-Jones, Chairman of the FCA, explains that wholesale markets and the provision of advice are two new priorities, while the others continue to sit at the top of the FCA’s list. In practice, this is likely to mean that the FCA’s thematic reviews and market studies over the coming year will focus on these new areas, although they are not directly named in Annex A to the business plan as one of the forthcoming thematic reviews and market studies.
For each of the seven priorities, the FCA has set out what it considers would be a measure of success in a particular area. The measures of success for the wholesale markets priority relate to the reputation of and confidence in the UK markets but, interestingly, there is no indication of how a Brexit1 could affect this measure.
The measures of success for the advice priority are an improvement in consumer satisfaction scores about financial advice and an improvement in consumer complaints data about advice. Both of these measures suggest that the FCA will seek feedback from consumers about the advice they receive or will require firms to provide the FCA with complaints data (or possibly a combination of both). The measures appear slightly crude methods of identifying whether the FCA’s objectives in this area have been achieved, given that the Business Plan states that the FCA is seeking to ensure that firms give good quality and suitable advice which meets the needs of the consumer. Ideally, the FCA might focus on improving the “front-end”, i.e. the advice that firms give, rather than admonishing firms for the “back-end”, i.e. the complaints that they receive in respect of this advice. However, the FCA’s approach is perhaps understandable in light of the regulatory principle for the FCA to use its resources proportionately.
The measures of success for the other five priorities indicate other issues which are giving the FCA a headache. Two other priorities state that a measure of success would be increased consumer awareness and understanding of scams and fraudsters’ techniques, while another states that a measure of success would be increased customer awareness of the potential benefits of switching providers and prompt shopping around. This was clearly set with a recent Occasional Paper2 and the ABI and BIBA’s Code of Good Practice3regarding support for potentially vulnerable motor and household customers in mind.