Advisers are warning Liz Truss now is not the time to merge the country’s financial watchdogs and any proposal to do so must clearly define any benefits the move would bring.
They also highlighted that any significant regulatory restructure risked creating unintended consequences along with introducing a massive financial and time cost for the industry.
Health & Protection spoke to advisers in the wake of reports that the prime minister candidate is considering merging the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Payments Systems Regulator (PSR) should she win the race to succeed Boris Johnson.
The last major shake up of the UK’s financial regulators came in April 2013 under Conservative prime minister David Cameron and chancellor George Osborne when the previous Financial Services Authority (FSA) was split up into the FCA and PRA.
Isaac Feiner, managing director at Lifepoint Healthcare, said the Conservative government should concentrate on more fundamental issues in the wider economy before starting to restructure an entire industry’s infrastructure.
“There would have to be some very clearly defined benefits that they were trying to achive by doing this that would benefit everybody for embarking on this,” Feiner added.
“It would be a massive undertaking to put together so many regulatory bodies.”
Alan Lakey, director of Highclere Financial Services, told Health & Protection that launching a new single regulator would result in a change of rules and processes which would cost advisers money and time.
“The first thing that would happen is it would have a new name to differentiate it so everyone has to get their business cards and their headed paper reprinted,” he said.
“And then the last time there was a change of a regulator the FSA told us that we had to write to all our clients to say that the FCA is now the new regulator. So we had to send 700 letters for that for something that frankly most consumers don’t know or care about.
“There’s a lot of aspects to it. It’s not just the different emphasis that they place on how to regulate. It will be the impact and the unintended consequences of the change as always.”
Andrew Wilkinson, director at Moneysworth, told Health & Protection that advisers and the FCA have an awful lot of work on their hands contending with the Consumer Duty so now was not the right time for such a merger.
Though Wilkinson noted he was not completely against the idea.
“One thing that does bother me is wriggle room through certain aspects of things being dealt with by different regulators and it does make sense that if we have one regulator we would know what their rules were,” he added.