The boss of the new Financial Conduct Authority, Martin Wheatley, will say in a speech tonight that he wants to bring a “more human” face to the financial regulator which has taken on many of the roles of the old Financial Services Authority.
Wheatley, in his role as the watchdog’s chief executive, will say: “I want the FCA to bring a more human face to the regulation of financial services; a more pragmatic approach to regulation. Not only to defend against sharp practice but also to encourage better decision making among consumers.
“The best financial service companies, the most consumer-focused, go to considerable pains to make sure their customers are steered towards the best products and the most suitable. We should applaud these firms and learn from them.”
He is expected to say: “‘Buyer beware’ becomes hard to defend when unsophisticated customers are buying seriously complicated financial products, where the risk of failure is far more dangerous than a decision in the supermarket to buy three bananas instead of one. There are questions that many investors simply will not ask because they are humans, not automatons.”
Wheatley will tell the City he expects the regulatory system to use behavioural economics to ascertain whether people are being put off switching products through “inertia, inattention or even the simple fear of regret from making a wrong decision”.