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Monday, January 29, 2024

FCA chair: Pension Freedoms triggered issues

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Outgoing FCA chair Charles Randell – in one among his final main speeches earlier than he stands down – has mentioned that in hindsight “extra might have been executed” to guard folks from the unfavourable impacts of the Pension Freedoms which had been launched in 2015.

The freedoms, launched by then Chancellor George Osborne, have been each hailed for opening new advantages for pension savers but in addition for unleashing a wave of unsuitable pension transfers and scams, costing hundreds of thousands to place proper.

In a speech to the Centre for Industrial Legislation Research at Queen Mary College of London final week, Mr Randell mentioned: “As I’ve beforehand mentioned, the pace with which Pension Freedoms had been launched in 2015 gave rise to a really large execution problem for everyone: trustees, The Pensions Regulator, the FCA and the Cash and Pensions Service, or Pension Smart, because it then was. 

“The insurance policies and procedures essential to mitigate the potential hurt to shoppers from the Pension Freedoms had been nonetheless being retrofitted six years later. With hindsight, extra might have been executed to guard folks from dangers launched by the Pension Freedoms coverage, notably if extra time had been given to organize.

“It’s clear from the steps taken since 2015 that the coverage itself and the broader system to implement it had been discovered wanting.”

Mr Randell, who is because of step down shortly as FCA chair a 12 months early, additionally warned that it was not real looking to anticipate the FCA to deal with issues with ‘excessive danger investments’ by itself. The dimensions of the issue was too big for one regulator, he mentioned, and requires laws, authorities assist and a wider effort to crack down on dangerous investments.

He mentioned: “We’ve accepted the suggestions of an unbiased evaluation into the case of London Capital & Finance (the collapsed mini-bond supplier), and we’re implementing them in full. However combatting the massive variety of unsuitable and generally fraudulent investments that are on the market, notably on-line, requires a much wider set of measures. It’s merely not one thing the FCA can do its personal.”

“The lesson from…case research – each the place partnerships have labored nicely and the place they haven’t been as robust as they wanted to be – is that addressing many points in monetary regulation requires not simply simpler regulators, but in addition extra collaborative motion throughout policymakers to ship the fitting outcomes in the true world – insurance policies which might be primarily based on actual human behaviour. And insurance policies which might be solely launched when the system is able to put them into follow. We have to apply this lesson to the longer term.”

In his speech he held out the potential of the FCA taking up crypto regulation however mentioned this was an enormous job and wanted to be thought by means of rigorously.

With a brand new Monetary Providers and Markets Invoice on the best way, he additionally referred to as for the independence of the FCA to be protected and for it to not be subsumed into authorities.

Different key themes for his speech included a plea for “the buyer’s voice” to be entrance and centre in regulation and “in each boardroom” and the necessity for a “coverage partnership” between Authorities and regulators to ship good outcomes for shoppers.


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