In one of the recent conventions of Money Marketing Interactive Debbie Gupta, the co-director of financial advice supervision and life insurance talked about on to the biggest concern these days in the financial industry. That concern is malpractices and misconduct. She said that the advisers are failing majorly at pointing out bad practices and that can be a big regulator problem.
She highlighted that advisers and regulators need to understand that they are all on the same side and one should take responsibility to showcase what is good conduct and create a barrier between good and bad.
All this discussion though might sound very interesting but that only the upper layer of it. there are a huge gap and mistrust between the FCA regulators and the advisers. And this became more clear and transparent when after this discussion came out on Money Market, there was a huge number of negative comments against FCA.
To improve any industry or form it is important to recognize the damaging practices so that they can be rectified. This is the reason why it is important to call out the malpractices out I the open, to make sure that they are seen and not ignored. Doing this one can also increase the standards of the FCA and also will improve the professional reputation of the regulators and advisers equally. This reduces the damage substantially and will enhance the public image as well.
Reasons for avoidance
Usually, the advisers give a lot of arguments, and the major one among them is that calling out bad practices is just a waste of time. Because they say that most of the times they see things and they hope that nothing comes out of it, but if they raise a voice then may end up getting in the brunt with the regulators.
However, on the other hand, there had been many concerns which raise a finger towards the regulators. For example; Neil Liversidge of London capital and finance says he raises concerns but FCA did nothing for three years and after that firm collapsed leaving around 11,500 investors clueless.
When it comes to numbers there are all around 8,763 advisors from almost 5,281 advisory firms. Now that regulators point out the real concern is lack of resources. They say that the advisors need to speak up whenever they come across any kind of malpractice, or else it can be very difficult to police through this entire advisory universe.
After all the bleak things there is a relief that FCA has to increase its overall resource stack to handle and manage the whistleblowing. They now pay a lot of attention towards handling issues like putting fines, send warning letters, withdraw permissions, check for any involvement and also ask businesses to change their way.
Recently it was seen that FCA has taken larger steps to enforce strong action and also has done a lot of helping out the regulators. After all, mitigating any kind of malpractice and calling it out in time can avoid anything bad from happening. It will also reduce the chances of increasing ones financial services compensation scheme liabilities on the advisers.