Ms Chambers told delegates it was vital that consumers were able to access and identify investments that “suited their circumstances and attitude to risk” adding key to this was that consumers “get the advice and support they need and only access higher risk investments knowingly and that they are protected from scams”.
She added: “We want consumers to know that when things go wrong as they sometimes do, where to seek compensation and for the cost of that compensation to be met by firms in a fairer and more sustainable way.”
It comes less than a week after PIMFA called on the Government to use FCA fines to bring the cost of the FSCS levy down in the short-term in order to help well run firms manage the cost burden created by the levy and ensure a polluter pays model is put in place sooner rather than later.
Ms Chambers referred to the FCA’s previously stated aims to achieve this environment. They included a 20% reduction in the number of consumers with higher risk tolerance holding more than £10,000 in cash by 2025, with the aim of encouraging them to move into mainstream investments. Another FCA aim was a 50% reduction in the number of consumers investing in higher risk investments that either indicated a lower risk tolerance or demonstrated characteristics of vulnerability by 2025. A third aim, Ms Chambers said, was to seek a reduction in the amount of money consumers lose to investment scams by a reduction in scams perpetrated or facilitated by authorised firms.
The FCA was open to ideas for change in order to bring the cost of compensation down, Ms Chambers said. But she added the industry faced “a major problem” in that only 35% of consumers agreed regulated financial firms were honest and transparent in their dealings with them. This was one of the reasons behind the introduction of the new Consumer Duty by the FCA, she said.
Tackling online fraud was reliant on clear legal obligations placed on online platforms, Ms Chambers added and recent moves to create those obligations through the Government’s Online Safety Bill were welcome, she added.
Tim Fassam, Director of Government Relations and Policy at PIMFA, commented: “I’d like to thank Therese Chambers for her time and her insights today at Virtual Fest 2022. We are agreed, as ever, that we want to see a consumer investment market in which consumers can access and identify investments that suite their circumstances and attitude to risk and get the advice and support they need.
“At PIMFA we have worked very hard, particularly through our campaign work on the Online Safety Bill to protect consumers from scams and will continue to do so and we agree that consumer should only access higher risk investments knowing the risk they are taking.
“We support the efforts of the FCA to encourage more people to invest and to do so in a way that provides confidence. We hope that the FCA and Government will listen to our proposals to use FCA fines to help reduce the cost burden from the FSCS levy on what are, in the majority, well-run advice firms and ensure that the polluter pays, until a longer-term solution can be agreed upon.”
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