FCA CEO pledges to 'revolutionise' financial advice

FCA CEO Nikhil Rathi has pledged to “revolutionise financial advice” as part of a package of reforms to break down the barriers to business growth in financial services. In a letter to the Prime Minister, Chancellor, and Secretary of State this week he promised to achieve “deep reforms” but says he will need to boost resources to cope with the likely greater risk. Mr Rathi did not make clear in his letter what 'revolutionising' financial advice refers to but it is likely in part to refer to the current advice-guidance boundary review which is likely to usher new forms of simplified and cut-down advice to reach millions more people. This week Chancellor Rachel Reeves urged 17 regulators, including the FCA and the Pensions Regulator to “tear down” barriers to promote business growth. She will meet with the FCA in the near future. She plans further meetings to push her Plan for Change - a move to reduce regulatory barriers holding back business growth. In his letter Mr Rathi said he will ‘streamline’ regulation in response to calls from the Prime Minister and Chancellor to boost business growth. Mr Rathi said: “We want to collaborate with you in a fundamentally different way to support the growth mission. To achieve the deep reforms necessary, your acceptance that we will take greater risks and rigorously prioritise resources is crucial.” Among the measures being planned are reforms to listings rules, bolstering investment research, “revolutionising provision of financial advice”, launching long term asset funds, reforming the value for money framework for pensions to target better long-term returns and reforms to fixed income and commodity markets to sustain UK market leadership. The Prudential Regulation Authority (PRA) is also removing bonus caps and instigating pro-competitiveness changes to the remuneration regime. Mr Rathi said: ”Growth will be a cornerstone of our strategy, through to 2030. We already had significant work in train for this year, along with new proposals which go further. We have listed ideas to test with you and through wider consultation, which we would do as quickly as possible, including with our statutory panels. “This will be supported by academic research we have commissioned to better understand the links between financial regulation and growth.” He aims to: Implement a new prospectus regime, with shifts in thresholdsEase retail access to corporate bonds and enable a new market for private companies.Enable savers to invest more effectively, improving access to help and simplifying productReduce conduct requirements for wholesaleStreamline regulatory requirements on the asset management sectorThe FCA also says the UK needs a financial services 'digital infrastructure plan', to dovetail with ambitious AI plans and the FCA “stands ready” to play a leading role. The reduce the regulatory burden the FCA is already working to remove unnecessary red tape on how much data some firms must provide. The FCA handbook will also be streamlined with some rules removed or simplified. The FCA also plans to make the Senior Managers and Certification Regime “more flexible,” it says. Other FCA reforms being considered are: Remove the need for a Consumer Duty Board Champion now the Duty is in effectEnsure future consultations on consumer protection ask if the Consumer Duty is sufficient rather than adding new rulesBegin simplifying responsible lending and advice rules for mortgagesConsult on removing maturing interest-only mortgage and other outdatedReview the proportionality of reporting requirements and remove redundant returns, initially expected to benefit 16,000 firms.The FCA will also speed up authorisation so firms can quickly start up and grow. He also revealed that he is considering reforms to the redress framework which may need legislation. FCA CEO letter to government on planned reforms

FCA CEO pledges to 'revolutionise' financial advice

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