Consumer Panel questions FSA on balance of benefits compared to costs of regulation

25 June

The Chairman of the Financial Services Consumer Panel, John Howard, has today written to the FSA to question their most recent assessment of the benefits of regulation in its decision to scrap the menu of costs and initial disclosure document (IDD), which financial advisers are required to provide consumers.

In his letter, John Howard says:

"… in this case the FSA seems to have measured only selected benefits of regulation and only those directly measurable in economic terms. It has then used these results as the reason for dropping some key consumer protections, in the form of the price menu and IDD.

This decision causes us to question the FSA's assessment of the consumer benefits of regulation and we urge the FSA to take broader aspects of consumer benefit into account when making decisions about costs versus benefits in future."

Full text of letter [PDF]

 

Notes to editors

1. The FSA established the independent Financial Services Consumer Panel in December 1998 to advise its Board on the interests and concerns of consumers and to report on the FSA’s performance in meeting its objectives. The Consumer Panel has statutory status.
   

2. The emphasis of the Panel’s work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA’s remit. More information about the Panel's work is available on this website.
   

3. The Consumer Panel brings together a wide range of relevant experience. This includes financial services regulation, working with vulnerable consumers, consumer protection, consumer education, front-line money advice, legal expertise, competition policy, public policy analysis, market research and media.
   

4. There are currently twelve members of the Panel as listed below.

   John Howard (Chairman)
   Adam Phillips (Vice Chairman)
   Kay Blair
   Michael Chapman
   Stephen Crampton
   Caroline Gardner

   Jenny Hamilton
   Tony Hetherington
   Nick Lord
   David Metz
   Lindsey Rogerson
   Carol Stewart