Work and Pensions Select Committee (WPC) chair Frank Field has accused the Financial Conduct Authority (FCA) of “lumbering into action” after the regulator announced plans to consult on contingent charging.
In February 2018, the WPC urged the FCA to ban the use of contingent changing in financial advice, claiming it was “a key driver of poor advice” and that “genuine independence is not compatible with a charging model that only rewards advisers for recommending a particular course of action”.
Later that year the FCA decided to hold off on banning the practice, though promised it would carry out further analysis and intervene if it felt it was appropriate to do so. Earlier today (30 July), the FCA announced plans to consult on banning contingent charging.
On the FCA’s newest plans, Field (pictured) said: “A mere 18 months after we warned that a major mis-selling scandal was erupting, the FCA is at long last lumbering into action – not action against the thieves who are stealing people’s pensions, but asking for more consultation. It’s like the good Samarian going out to consultation before he acts.”
He continued: “How many more savers are going to have their savings pinched from them before the FCA lifts a finger? The FCA’s own research shows that huge numbers of pensioners are being fleeced right now by unscrupulous advisers with glaring conflicts of interest. Let’s hope they finally put an end to this racket.”
It is not the first time the WPC has been strongly critical of the FCA. Last year it described the regulator’s handling of the British Steel saga as “grossly inadequate” and warned the FCA must take care to ensure it is not “sleepwalking into yet another huge mis-selling scandal”.