This proposal coincides with today's Committee stage of the Financial Services Bill where MPs are set to debate the responsibilities of the financial services industry.
The briefing paper from the Consumer Panel sets out the case for a fiduciary duty of care principle to be imposed on the providers of financial services.
This would ensure that the industry delivers what consumers already expect: it would deliver stronger consumer protection standards, encourage greater trust in firms and, support a more straightforward and effective regulatory regime which would be better for both the customer and the industry.
Adam Phillips, chair of the Consumer Panel, commented: "Given the clear failures by providers of financial services to treat their customers fairly we believe the new act should require the industry to provide the service that consumers expect.
“Customers of banks should be owed the same fiduciary duty as those seeking the advice of a lawyer or an MP, with providers prohibited from profiting from conflicts of interest at the expense of their customers.
“The Panel has suggested an amendment which, if supported by MPs, will allow the UK authorities to follow the recommendation of the Joint Committee of Parliament which examined the draft Bill in 2011 and which called for a clear responsibility on firms to act honestly, fairly and professionally in the best interests of their customers.
“The Panel believes that the new Financial Conduct Authority should be given powers to make rules to ensure that the industry would have to take their customers' interests into account when designing products and providing advice."
