The Financial Conduct Authority (FCA) has recently come under fire for its lack of action to help advice firms, and it seems the regulator will not step in to support all businesses.
Nikhil Rathi, newly appointed chief executive of the UK financial watchdog, said in an episode of the Inside FCA podcast: “We know that [the pandemic] has resulted in financial pressure for a number of the firms we oversee.
“We cannot stop some of the firms that are under FCA oversight from failing. We are not, nor should we be, a zero-failure regulator.”
But he stressed that in those circumstances, the UK regulator will work to “ensure that risks are managed and consumers are adequately protected”.
Tipping point
This comes days after Rathi spoke to the Treasury Select Committee about the FCA’s issues with a number of “small financial advice firms” and “Sipp operators”.
Rathi admitted that the second lockdown “may be the tipping point” for those businesses.
The financial advice industry has voiced its anger about the FCA, mostly about rising levies and regulatory fees.
Recently, James Pearcy-Caldwell, chief executive of Aisa Group, told International Adviser that the FCA is “out of control”, while Phil McGovern, director of MPA Wealth Management, added that the industry lacks a “real lobbying group” to help advisers.
