Goodbye FSA, Hello FCA
Yesterday was a big day for the UK’s financial services industry as the country’s long-established financial regulator, the Financial Services Authority, or FSA, ceased to exist.
In effect, the FSA, as we once knew it, has been divided into three different divisions, meaning that the UK’s finance world now has three distinct watchdogs to ‘regulate’ three distinct areas.
These new regulators are the Financial Conduct Authority (FCA), the Prudential Regulatory Authority (PRA), and the Financial Policy Committee (FPC).
Financial Conduct Authority (FCA)
The FCA is the body which is most relevant to the deVere Group as it will oversee almost all of the UK’s customer-facing financial services firms, including financial advisers and investment brokers – but excluding the main high street banks and major insurers.
Prudential Regulatory Authority (PRA)
The PRA is a sub-division of the Bank of England and is charged with monitoring banks, investment banks and the major insurance brands to ensure that these companies stick to the new, tougher rules. Its primary remit is to keep the UK’s financial system stable so that the taxpayer will not have to bailout another big banking organisation.
Financial Policy Committee (FPC)
Part of the BoE’s Monetary Policy Committee, the FPC does not regulate firms as such but has overarching responsibility for regulation and general analysis of the industry within the wider economy.
When the three new regulators were announced in last year’s Finance Bill, the Chancellor, George Osborne, said that he hoped they would have “more teeth” than the FSA, and that they would actively ensure that clients of financial services companies were always put first.
I wholeheartedly champion its sentiment, as if this creates confidence, increasesaccessibility to advice and raises standards, everyone – clients, advisers and the industry itself – reaps the enormous, tangible benefits of financial planning.
We’re in exciting times and I look forward to supporting the FCA, the new and empowered financial services regulator, on its mission.
Nigel Green deVere Group
blog written 3rd of April