New Financial Conduct Authority (FCA) chief executive Andrew Bailey has said that he wants to have a ‘close’ relationship with the Financial Ombudsman Service (FOS).
Earlier this year a report by the National Audit Office (NAO) recommended the FCA should work more closely with the FOS to ensure consumers were able to access advice without turning to claims management firms.
The NAO report also cited concerns from financial services about the cost of providing the same information to both the FCA and the FOS.
Speaking to MPs on the Treasury Select Committee, Bailey (pictured) appeared to support the recommendation when asked about the regulator’s relationship with the FOS.
‘I think the relationship has to be close,’ he said.
‘There’s a constitutional independence which has to be respected, but I really hope that we broadly have a relationship where we are on the same wavelength in terms of our basic attitude towards underlying issues. If we are not its going to be a problem.’
He added that many complaints he received from small businesses about the FOS were actually a question of the FCA’s own adjudication processes, for example running its own compensation scheme for interest rate hedging product mis-selling.
Advice review difficulty?
Bailey was also asked about the financial advice market review (FAMR), which earlier this year made 28 recommendations designed to make advice more affordable and accessible.
At the FCA’s annual public meeting earlier this week Bailey committed to implementing the recommendations as soon as possible to tackle the so-called ‘advice gap’ that appeared following the retail distribution review.
However, in front of the MPs he admitted he was not certain theFAMR proposals would help fill the gap.
‘There is now a gap and the FAMR proposals have got to actually fill that gap. We have got to be very clear in implementing them, keep asking ourselves the question will they do it or not?
‘I think they have the potential to do it but I don’t think we can sign that one off with conviction yet.
‘A lot of it rests on the question of will we get useful technology which will be put to work and the jury’s out on that one.’