The U.K.’s Financial Services Authority is setting up a task force designed to raise consumers’ capability and confidence in dealing with financial services and products. The regulator is hoping that better-educated consumers could mean less regulation for the industry.

The FSA’s new CEO John Tiner said that he will set up and chair an Advisory Group charged with establishing “a clear view of what the industry, the Government and other parties should best do.” It expects to report by March 31, 2004.

“Firms and consumers have a mutual interest in the market working better and this means having more capable and confident consumers who can identify their needs and then know what to do about them. We think there needs to be a major step change in activity to educate and inform the consumer and that the admirable, but patchy, efforts of many private and public sector bodies working in this area need to coalesce around a national strategy for financial capability,” Tiner said in a speech to a Corporation of London dinner at the Mansion house in London.

He suggested that better-educated consumer could mean less regulation. “The prize here is very great indeed. If capable consumers acting collectively can be a more influential force in the market there could be a consequently less rigorous regulatory regime.” He also said that the FSA hopes to introduce fewer new rules in the future, cutting this year’s issuance of 60 new consultation papers in half next year.

Tiner said that the FSA is developing a “product risk framework”. “This is a tool that will help us to assess the risks to consumers of different products being launched or marketed by firms. The framework has three dimensions: the inherent characteristics of the product; the controls firms have in place around the marketing of it; and the target audience of consumers for the product. This is not product regulation through the back door, but a tool to provide an early warning of products that may be about to be launched or are circulating in the market that present particular dangers to consumers.”