The Financial Conduct Authority’s (FCA) Protection Market Study will mirror the regulator’s Premium Finance Study’s firm-by-firm Consumer Duty approach rather than implementing any market-wide interventions, according to CEO Nikhil Rathi.
Upon release of its Protection Market Study interim report at the end of last month, the regulator revealed it was “not anticipating making any significant market wide interventions”.
Speaking on the Fairer Finance podcast, when asked specifically whether the Protection Market Study will follow its Premium Finance Study’s firm-by-firm Consumer Duty approach rather than making any market-wide interventions, Rathi said: “Our prevailing approach will be evidence-based… we have the Consumer Duty that gives us a tool to work with those firms where we see outlier behaviour.”
On premium finance, despite it being previously described by the FCA’s Matt Brewis as “a tax on the poor,” Rathi argued that a market-wide intervention could “end up reducing availability of that product or putting up prices that actually make it harder for the people who need it most.”
Wind of change
James Daley, managing director at Fairer Finance, maintained that what has become clear from the interview was that the regulatory winds had changed over the last 18 months.
“The FCA is under pressure from the Treasury to prioritise growth and to deal with market failure and misconduct through supervisory conversations behind closed doors,” Daley said.
“As Dame Meg Hillier pointed out last week, the chancellor has had only one meeting with a consumer group since taking office – compared to dozens of meetings with banks, insurers and asset managers.
“And it’s clear that this emphasis from Treasury is also following through to the way its regulator acts.”
