The reappointment of FCA CEO Nikhil Rathi this week for a further five year term was a surprise to some who expected a new face at the helm of the UK’s leading financial regulator.
However, with all the “unpleasantness” going on in global markets, Chancellor Rachel Reeves, perhaps wisely, has decided to stick with the current incumbent.
Realistically, Mr Rathi, 45, was the sensible choice for another five year term and he has proved recently that he has been listening to government calls to promote a “growth agenda.”
This would have counted in his favour.
I have previously voiced my concerns as to whether a financial regulator, which sees itself as a financial police force as much as anything else, is the right organisation to promote growth in the companies it regulates but it seems Mr Rathi is the right person.
Certainly, I think we have probably seen ‘peak regulation.’ Recent moves to scale back or defer regulatory plans suggest the FCA and the Treasury are not in the mood to add further regulations. The recent abandonment of the requirement for ‘Consumer Champions’ on boards was just one recent sign of that.
So what next? It seems Mr Rathi will most likely look for areas where the FCA can promote the growth of financial services firms as much as possible, with at least some commensurate regulation.
A recent announcement on promoting alternative investments suggest the FCA is open to taking a little more risk too.
I also fully expect the advice/guidance boundary review, due to report on any reforms soon, to open the door to a new wave of financial guidance and simpler investment products aimed at the mass market.
As the FCA repeatedly points out these days, only 9% of the population receives professionally-delivered financial advice and that’s just too low. I agree.
Financial Planners, with their upmarket, costly but much appreciated financial advisory services were never designed to be the purveyors of mass market advice and indeed they are not.
One of Mr Rathi’s key jobs over his next term will be to ensure that the coming mini-revolution on financial guidance and products is beneficial to consumers without causing them harm.
His experience over the past five years will serve him in good stead.
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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and mainstream news. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days. Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Follow @FPT_Kevin
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