As part of its review into retail distribution, the FSA has revealed it will be targeting the sustainability of the retail sector, the impact of incentives, consumer access to financial products and services, and professionalism and reputation. Regulatory barriers have also been highlighted by the regulator as a theme to be addressed.
Designed to identify and address the causes of problems within the retail investments market, the regulator will publish a discussion paper in early 2007 highlighting its recommendations for the future of the sector.
Commenting on the areas for review, Clive Briault, managing director of retail markets at the FSA, said: “We want a sustainable retail distribution sector that is here today, here tomorrow and here into the future. We need to ask some hard-hitting questions about the structure of this market, such as whether it will always lead to adverse behaviour by some to the detriment of others? Is it capable of change? And does the regulatory framework really protect those it is designed to protect without stifling innovation?”
Briault admitted it was not the job of the regulator to dictate business models, but added:
“The areas we have identified are already firmly on the industry’s agenda and we now need to help take this forward. Our desire to act as a catalyst should come neither as a surprise nor a threat, but as an opportunity.”
A spokesperson for Nationwide Building Society, said the review should help the industry. “We welcome any move to improve financial services for consumers and enhance the professionalism and reputation of providers. We would welcome the opportunity to participate in any working groups set up.”
