Firms want clearer FCA communications about Brexit

Firms want clearer FCA communications about Brexit

The Financial Conduct Authority (FCA) and the FCA Practitioner Panel have published the findings from their 2017 survey of FCA-regulated firms.

The survey gives a view across the financial services sector of the FCA’s performance as a regulator. It provides the opinions of more than 2,000 regulated firms who completed the survey in March and April this year.

In previous years the Practitioner Panel has carried out a survey of regulated firms to gauge their perceptions of the FCA and to what extent it is meeting its objectives. This year this survey has been combined with the FCA’s annual firm feedback questionnaire to produce a single report, in order to reduce the amount of data requested from firms.

The survey shows that both the industry’s satisfaction with its relationship with the FCA and the industry’s rating of the FCA’s effectiveness have increased.

The FCA says it particularly values the feedback on how well it is achieving its three operational objectives:

  • Securing an appropriate degree of protection for consumers;
  • Protecting and enhancing the integrity of the UK financial system;
  • Promoting effective competition in the interests of consumers in the financial markets.

This year firms reported increased confidence in the FCA’s ability to deliver against all three objectives. Confidence in the consumer protection objective and protecting the integrity of the financial system rose compared to last year.

Understanding of the FCA’s competition objective, which is the newest of the objectives, has consistently scored lower than the others in previous years. This year, however, 60% of firms reported that they were very or fairly confident in this objective, up from 56% last year.

Last year there were lower levels of satisfaction in the long-term savings and pensions sector. The Practitioner Panel encouraged the FCA to focus on this area in particular, and this year there have been significantly more positive results for this sector.

The survey identified three key areas for further improvement:

  • Ensuring that firms, in particular consumer credit firms, clearly understand the FCA’s remit; the publication of the FCA’s Mission shortly after the research fieldwork took place should help to address this;
  • The volume of regulatory change makes demands on firms’ resources and firms are looking to the FCA to be more transparent about future plans;
  • The FCA should communicate directly and clearly with firms about Brexit.

António Simões, chair of the FCA Practitioner Panel, said: “We are encouraged by the findings of this year’s survey that there has been progress against all three of the FCA’s operational objectives. Last year we identified that there were concerns around the competition objective, and that the life and pensions industry was more generally dissatisfied with the work of the FCA than other sectors. To see progress against both these points is a sign that the regulator is heading in the right direction. The Panel will continue to work with the FCA to address the issues raised in the survey about communication, volume of regulation and the challenges of Brexit.”

Andrew Bailey, chief executive of the FCA, added: “We are pleased that firms continue to rate our performance as a regulator highly. But we know that we can always do better and the survey is very helpful in identifying a number of areas for improvement. In our Mission we committed to be more transparent, communicating clearly with firms so that they understand our role, remit and expectations. The survey also reflects concerns amongst firms about the uncertainty ahead for the financial services sector and we remain committed to delivering effective regulation which will enhance the UK financial system in the future.”