The objective will be to provide consumers with the education, information and generic advice needed to make their financial decisions with confidence. The Steering Group comprises senior people from government, firms, employers and trade associations, not-for-profit organisations, consumers and the media.
The Steering Group members are:
John Tiner, Chief Executive, Financial Services Authority (Chairman)
Luqman Arnold, Chief Executive, Abbey National plc;
David Clementi, Chairman, Prudential plc;
John Gummer, Chairman, Association of Independent Financial Advisers;
David Harker, Chief Executive, Citizen’s Advice;
Deirdre Hutton, Chair, National Consumer Council
Digby Jones, Director General, Confederation of British Industry;
Ruth Kelly, Financial Secretary to the Treasury; and
Ron Sandler, Chairman, Personal Finance Education Group
Media figure to be announced shortly
The establishment of the Steering Group marks the second phase of the FSA's public awareness work and, later this month, it will publish a paper setting out the thinking that has led it to adopt this approach. It first set out its aspirations on consumer education proposals in November 1998. Since then, from a standing start, the regulator has increased year on year the scale, range and topicality of its public awareness work. It has fostered initiatives on financial literacy (including in the educational system) and provided independent information and guidance to consumers through a variety of channels, both directly and in collaboration with others.
However, the FSA's experience (and that of others) has shown that much more needs to be done. There is a need to engage more and with a much wider range of organisations, so as to make the most of each other’s contributions, knowledge and experience. Discussions with a range of stakeholders and potential partners have found widespread agreement that there is currently a lack of a UK strategy to improve financial capability, that this gap should be filled and that all would like to see the FSA take on a leadership role.
The FSA has also increasingly come to see the interdependence between its regulatory measures for consumer protection and its public awareness work. The effectiveness of the information and advice delivered to consumers by firms is critically dependent not only on the quality of the information for its purpose but also on the capacity of the consumer to understand and to benefit from it at the time and place of its delivery. Consumer understanding and awareness influence directly both the nature and the intensity of the regulation needed for consumer protection and also whether consumers derive benefit from competition in the market place.
John Tiner, FSA, Chief Executive, said:
"Achieving a step-change in the level of financial capability is critical to ensuring that consumers are financially aware, can take responsibility for their financial affairs, and are able to influence the market. All agree that there is a great deal to be done but, currently, there is a lot of separate activities and a leadership vacuum. This is where the Steering Group comes in.
"With a strong Group setting strategy and overseeing its implementation we can ensure a more co-ordinated approach to raising standards of financial understanding. I believe this will lead to better value for money and will have a far greater impact on financial capability.
"At this stage, we have not set out to offer detailed measures. Our purpose is to offer for comment the main elements on which a strategy could be built if those concerned agree. Our statutory objective of promoting public understanding of the financial system, together with the ability to raise finance from the industry for this purpose, gives us a clear remit to lead this work.
"I would stress, however, that that this is not about centralisation, but about a co-ordinated and targeted approach, getting better value for the money currently spent, drawing in new money and implementing with a high degree of flexibility and autonomy. The FSA will have a part to play, in addition to its leadership role, but so will all those who are currently working in the field. We hope new players will join under the strategic umbrella."
The FSA Board will retain accountability for the FSA’s objective of improving public understanding of the financial system. The FSA, advised by the Steering Group, will publish the strategy by the end of March 2004. In addition to the Steering Group there will be a Working Group chaired by Anna Bradley, FSA’s Consumer Director. This Working Group will consist of similar stakeholder organisations to those represented on the Steering Group and will be charged with implementing the strategy.
