Pensions sector still least satisfied with FCA despite efforts to improve

The long term savings and pensions sector is still least satisfied with the Financial Conduct Authority (FCA), despite the regulator’s efforts to improve its work in the area in the past year.

According to the latest joint FCA and practitioner panel survey the long term savings and pensions sector reported lower levels of satisfaction with the regulator’s effectiveness than other sectors.

The results showed more than a third (38%) of pension firms wanted the FCA to be doing more to prevent wrong doing, just less than a fifth (18%) said the focus of regulation was on the wrong kinds of activities, and 17% said the FCA was ineffective in dealing with larger firms.

While the results showed an improvement from 2016, where pension and long-term saving firms gave even worse feedback across the board, the regulator acknowledged “a continued focus on this sector will be important in the near future”.

Achieving objectives

The survey collected the views of the financial services sector of the FCA’s performance as a regulator. It surveyed the opinion of 2,080 firms in March and April this year.

In particular, the regulator tested firms’ opinions on how well it achieves its three operational objectives: consumer protection, protecting the integrity of the UK financial system, and promoting effective competition.

Again, it found confidence was lower among the long term savings and pensions sector across all three objectives, than among other sectors.

Almost three-quarters (72%) of pension firms were confident the FCA is providing consumers protection compared with 79% of firms overall.

Just more than two-thirds (69%) of these firms felt the FCA protects the integrity of the financial system compared with 78% of firms overall.

Meanwhile just more than half (56%) of firms in the long-term savings and pensions sector felt the FCA promotes effective competition, compared with 60% of firms overall.

Overall improvement

However, not all was bad news. Overall the survey found the industry’s satisfaction with its relationship with the FCA and its rating of the FCA’s effectiveness has continued to increase.

Firms’ overall rating for the FCA’s effectiveness was 6.7 out of 10 last year, and has now risen to 7.0. Satisfaction with the FCA has increased steadily, from a mere 5.4 out of 10 in 2010 to 7.5 this year.

The survey identified three key areas for further improvement:

  • Ensuring that firms, in particular consumer credit firms, clearly understand the FCA’s remit; 
  • Ensuring the FCA is more transparent about its future plans for regulatory change;  
  • And ensuring the FCA communicates directly and clearly with firms about Brexit.

FCA chief executive Andrew Bailey said: “We are pleased that firms continue to rate our performance as a regulator highly. But we know that we can always do better and the survey is very helpful in identifying a number of areas for improvement.

“In our mission we committed to be more transparent, communicating clearly with firms so that they understand our role, remit and expectations. The survey also reflects concerns amongst firms about the uncertainty ahead for the financial services sector and we remain committed to delivering effective regulation which will enhance the UK financial system in the future.”

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