The UK Financial Services Consumer Panel is calling on regulators to impose a fiduciary duty on financial services firms in that country in order to better protect consumers.
At a hearing Thursday by a parliamentary committee considering legislation that proposes a new regulatory architecture in the UK, including the creation of a new Financial Conduct Authority (FCA), the Consumer Panel set out its proposals for stronger consumer rights, including calling for the adoption of a fiduciary duty, similar to the regulatory reform introduced in the US that seeks to impose a fiduciary duty on broker dealers.
Adam Phillips, chair of the Consumer Panel, said, “The US authorities have led the way with the powers to introduce a duty of care under Dodd Frank. It is time that UK lawmakers followed suit with an explicit power for the new FCA to drive better behaviour from firms.”
“The financial services industry needs to regain consumers’ trust. A stronger duty of care would go a long way to address the public’s loss of confidence in the regulation of financial services following the litany of scandals in recent years,” he added.
Additionally, the Consumer Panel is also calling for: greater transparency in disciplinary actions by the new regulatory bodies; more effective competition powers for the FCA; and greater accountability of the Bank of England to consumers, practitioners and Parliament.