The CII have published a response to the FCA approach to regulation.The CII's response to the FCA approach to regulation can be viewed on the CII's website at www.cii.co.uk/pages/research/responses.aspx
The current restructuring of the UK regulatory framework provides the opportunity for a rethink. In the past, regulators have been too reactive in their approach to identifying risks to consumers as well as the overarching solvency of financial institutions.
This has to change, and we are encouraged that the current proposals for conduct regulation seek to create a system which places "particular focus on firms' culture as a potential root cause of poor outcomes". It is now important to develop a clear framework for how the new conduct regulator - the FCA - identifies appropriate/inappropriate cultures.
Our belief is that those firms and practitioners demonstrating professional behaviour through a commitment to qualifications, continuing learning and ethical practice are more likely to provide quality advice. In a new era of ‘differentiated' regulation, FCA supervisors must distinguish between those that make a demonstrable commitment to professionalism from those that do not.
The term Chartered is awarded to individual practitioners within the insurance and financial advice sectors that commit to the highest standards of professionalism. A number of firms have also been awarded Chartered status by demonstrating a continuing commitment right across the organisation to higher professional standards in the public interest. These firms must meet stringent criteria in order to be awarded the title and must continue to maintain high standards.
We suggest that FCA supervisors take ‘Chartered' into account as one way of assessing whether or not firm's governing bodies have embedded a firm-wide culture that supports consumer protection and the wider public interest.
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