The Financial Services Practitioner Panel has welcomed a speech made by FSA chairman Callum McCarthy to the Corporate Communications Special Interest Group on the role of consumer responsibility in retail financial markets.
It applauded the FSA’s sentiment that an open and common-sense discussion on what may be responsibly expected from firms and consumers when they enter into financial contracts should benefit both sides – by giving firms that have met their regulatory requirements and the principles of ‘Treating Customers Fairly’ a greater degree of certainty, and by helping consumers to know what they have to do to achieve the best deal for themselves.
Roy Leighton, chairman of the Practitioner Panel, said: “The panel is very pleased the chairman of the FSA is launching a public debate on this important and difficult subject. We have long maintained that the lack of definition of consumer responsibility is a main driver of high regulatory costs in the retail sector, as firms in search of legal certainty may incur excessive costs in being extra careful in complying with existing rules and regulations; these costs will eventually get passed down to the consumer.”
In his speech McCarthy said: “Were the FSA to aim to relieve consumers of all adverse consequences, an environment would be created in which they no longer needed to weigh up the reasonableness of their financial decisions. No market can work effectively without involved consumers. To relieve consumers of retail financial services of the consequences of their actions would destroy this effective market.”
