In his Foreword to the Panel’s annual report for 2006/07, Chairman John Howard explained that ‘establishing a new system of paying for advice could prove to be the most important development in financial services since the FSA was created’.
The FSA is considering the future of commission in the retail Distribution Review set up at the beginning of 2007, and the results will lead to an FSA Discussion Paper, due to be published shortly.
At the same time, although the Panel’s annual report welcomes the FSA’s progress on the move towards more principles based regulation, there are still concerns about how firms will measure up. This is particularly so with the Treating Customers Fairly principle.
Howard said: “The industry is being asked to empathise with its customers – a laudable objective but one which may prove to be beyond the grasp of many organisations.”
The Panel rated the FSA as very strong on its work on financial capability and in improving its work on consumer communications. It also said it was strong on dealing with problems in PPI and mortgage exit administration fees.
However, it rates the FSA weak in its attitude to the increasing amount of industry guidance on FSA principles.
