Chris Hannant, policy director at AIFA, said the introduction of a new regulator offered an opportunity to set out clear criteria that can be used to measure its performance.
But he warned that measures outlined in today's consultation paper were "too subjective".
He said: "Regulatory authorities have previously had far too little public accountability for their actions. We would like to see clear and transparent outcomes set for the FCA that it can be judged on.
"At present the proposed criteria are far too subjective. The role of the regulator should be to foster a successful financial services sector and encourage consumers to take positive decisions about their finances.
"We need clear and measurable objectives, such as the levels of savings and protection consumers have."
AIFA suggested that a more measurable objective for FCA performance would be the reduction in compensation claims and overall levels of compensation.
Hannant added: "The regulator has made clear it will take a more interventionist approach. A key measure of the success of this approach will be a reduction in compensation claims and overall levels of compensation. The regulator should be accountable for delivering on this objective.”
