Who's Who? Financial Services Authority (FSA)
The FSA is just the regulator. So why should you care?

Because, just occasionally, it hits the nail on the head. And because you should.

What does it do?
The FSA is the financial regulator established under the Financial Services and Markets Act (FSMA) in 2000, replacing a whole host of separate regulatory bodies. The regulation of the whole Financial Services industry is entirely in its hands. It reports to the Treasury.

The FSA has four stated objectives: to maintain market confidence; promote public understanding of the financial system; protect consumers; and to fight financial crime. It is significant that the objective of "maintaining market confidence" comes first.

The private saver
It is an open secret that there are strong divisions of opinion within the FSA on the extent to which it should get involved in consumer issues. We have some sympathy. It is caught between the King Kong of HM Treasury (which appoints its Board) and the Godzilla of the Financial Services Industry.

Nevertheless it is all we've got, and if we are to create constructive change in the system for private investment it can only be done by pressuring the FSA (unless you have enough clout to pressure the Treasury direct).

How to press
The FSA has the same difficulty dealing with the great unwashed as any branch of the civil service. It issues a stream of consultation and discussion papers, many of high quality. But the process of response discourages anything other than professional submissions. And 'professional' in this case frequently means 'industry members fighting their corner'. There is no channel either for general representations or specific comments on financial products.

It gets worse. If you should manage to get a comment through, a provision of the FSMA forbids the FSA to do anything other than acknowledge the comments it has received. It may not publish them, tell you what they are doing about them or tell you the result (unless the matter gets as far as a prosecution).

Therefore any comments you make to them disappear into a black hole. This is not encouraging.

There is another body called the Financial Services Consumer Panel (FSCP) established to "represent the interests of consumers".

Heard of it? Thought not.This is not the FSCP's fault. It has only a handful of staff and neither the time nor the budget for self-promotion. Nor can it afford to actually engage with the public. The Panel's website states that "the Panel is unable to deal with individual consumer's concerns" and "The Panel is interested to hear comments and views from consumers on the way that financial services are regulated, although it is not possible to respond to comments individually".

However the dozen panel members represent a wide spread of interests and it remains one of the few consumer bodies with the expertise and inclination to push the interests of the consumer with the FSA.

But don't despair.
The FSA has been quite surprisingly proactive in venturing into conflict with the Industry, though it has tended to stop short of landing any damaging blows. It has developed a consumer education website, MoneyMadeClear, that is a long way from cutting edge in terms of its appearance and use of educational tools but is at least an improvement on its previous perfunctory efforts.

Our view is that if you have something sensible to say you should make the effort to say it to both the FSA and the FSCP. It's thankless, but it's possible that, cumulatively, it could have some effect.

Anyway, these are the only shows in town.




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