Large firms see notable drop in trust of FCA over past year.
Jul 21, 2023 12:30:14 GMT
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Large firms see ‘notable drop in trust’ of FCA over past year
By Michael Klimes 20th July 2023 4:05 pm
There has been a “notable drop in trust” among large regulated firms towards the regulator over the past 12 months.
An annual survey that asks regulated firms to assess the Financial Conduct Authority’s work was published today (20 July).
The FCA and Practitioner Panel 2022/23 survey said big firms that have an individual supervisor have become more wary of the regulator.
These companies referred to as ‘fixed firms’ replied they were twice as likely to say that their trust in the FCA had decreased in this survey compared with the previous one.
In numeric terms that is 22% in 2022-23 compared with 11% in 2021 while attitudes towards supervisors have “deteriorated somewhat” over the last 12 months.
The proportion of fixed firms saying that they now trusted the FCA more than they did 12 months ago was largely unchanged since 2021.
The trend among ‘flexible firms’ (smaller firms with no individual supervisor) was less marked, with similar levels of trust compared to 2021.
In both years around one in 10 flexible firms said their trust in the FCA had increased in the last 12 months.
This was balanced by a similar proportion saying their trust had decreased in the same period.
Flexible firms constitute the majority of respondents (99%) in the survey.
Firms were also asked how effective the FCA had been in communicating the proposed approach to implementing the Consumer Duty.
It was seen as effective by more than three-quarters of fixed firms (78%), with fewer than one in five firms feeling the communication was not effective (17%).
Flexible firms had an almost identical response, with more than three-quarters of flexible firms rating communication as effective (78%).
This was compared with 15% who felt it had not been effective date.
Firms with appointed representatives (ARs) were asked how firms in their sector had changed the way they oversee ARs due to FCA actions in the last 12 months.
Only 1% of firms said that oversight of ARs in their sector had decreased in the previous 12 months, with three in 10 (30%) saying it had stayed the same.
However, the majority of firms (56%) reported an increase in oversight in the last 12 months.
The regulator also published figures on the problem firms it has cracked down on.
In the past year it stopped 627 firms, that failed to meet the minimum standards, from operating.
This is up 30% from the previous year, illustrating the FCA’s determination to enforce high standards in the financial services sector.
FCA chair Ashley Alder said: “Maintaining high standards is key to supporting growth. We are helping firms test their innovative products, guiding firms through the authorisation process and are supporting a range of supply and demand-side market reforms.
“On the 31 July, the new Consumer Duty will raise the bar for retail financial services and place good consumer outcomes at the heart of everything they do.”
By Michael Klimes 20th July 2023 4:05 pm
SOURCE: www.moneymarketing.co.uk/news/large-firms-see-notable-drop-in-trust-of-fca-over-past-year/?eea=*EEA*&eea=SkM1WW9ONVFEMndQbXNSK202M0EwWmRKQThTMmpJNlpYcy9JbnZBYkdjMD0%3D&deliveryName=DM159506
Large firms see ‘notable drop in trust’ of FCA over past year
By Michael Klimes 20th July 2023 4:05 pm
There has been a “notable drop in trust” among large regulated firms towards the regulator over the past 12 months.
An annual survey that asks regulated firms to assess the Financial Conduct Authority’s work was published today (20 July).
The FCA and Practitioner Panel 2022/23 survey said big firms that have an individual supervisor have become more wary of the regulator.
These companies referred to as ‘fixed firms’ replied they were twice as likely to say that their trust in the FCA had decreased in this survey compared with the previous one.
In numeric terms that is 22% in 2022-23 compared with 11% in 2021 while attitudes towards supervisors have “deteriorated somewhat” over the last 12 months.
The proportion of fixed firms saying that they now trusted the FCA more than they did 12 months ago was largely unchanged since 2021.
The trend among ‘flexible firms’ (smaller firms with no individual supervisor) was less marked, with similar levels of trust compared to 2021.
In both years around one in 10 flexible firms said their trust in the FCA had increased in the last 12 months.
This was balanced by a similar proportion saying their trust had decreased in the same period.
Flexible firms constitute the majority of respondents (99%) in the survey.
Firms were also asked how effective the FCA had been in communicating the proposed approach to implementing the Consumer Duty.
It was seen as effective by more than three-quarters of fixed firms (78%), with fewer than one in five firms feeling the communication was not effective (17%).
Flexible firms had an almost identical response, with more than three-quarters of flexible firms rating communication as effective (78%).
This was compared with 15% who felt it had not been effective date.
Firms with appointed representatives (ARs) were asked how firms in their sector had changed the way they oversee ARs due to FCA actions in the last 12 months.
Only 1% of firms said that oversight of ARs in their sector had decreased in the previous 12 months, with three in 10 (30%) saying it had stayed the same.
However, the majority of firms (56%) reported an increase in oversight in the last 12 months.
The regulator also published figures on the problem firms it has cracked down on.
In the past year it stopped 627 firms, that failed to meet the minimum standards, from operating.
This is up 30% from the previous year, illustrating the FCA’s determination to enforce high standards in the financial services sector.
FCA chair Ashley Alder said: “Maintaining high standards is key to supporting growth. We are helping firms test their innovative products, guiding firms through the authorisation process and are supporting a range of supply and demand-side market reforms.
“On the 31 July, the new Consumer Duty will raise the bar for retail financial services and place good consumer outcomes at the heart of everything they do.”
By Michael Klimes 20th July 2023 4:05 pm
SOURCE: www.moneymarketing.co.uk/news/large-firms-see-notable-drop-in-trust-of-fca-over-past-year/?eea=*EEA*&eea=SkM1WW9ONVFEMndQbXNSK202M0EwWmRKQThTMmpJNlpYcy9JbnZBYkdjMD0%3D&deliveryName=DM159506
