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Topics: FSA| consumer| Financial Conduct Authority| Hector Sants
Hector Sants, chief executive of the outgoing Financial Services Authority (FSA) has told MPs the industry holds the "flawed" belief its responsibility to consumers ends with providing product information at the point of sale, a situation the new regulator will look to correct.
Sants told MPs at a Treasury Select Committee (TSC) evidence session on the new Financial Conduct Authority (FCA), that ensuring a fair split of responsibility between consumers and financial service providers will be “problematic” for the FSA's successor.
But the industry's current belief it that its responsibilities end with providing product information at the product sale, he said, which he branded "flawed".
All of the FSA's research suggested providing lots of information does not improve consumers' decisions, he said.
He told MPs many consumers lack the mathematical skill to understand the information.
John Mann, Labour MP for Bassetlaw, accused the industry of being too "opaque".
"Consumers see opaqueness when it comes to decisions made by financial institutions, so how can they take responsibility for their own decisions?" Mann said.
Sants admitted there is not yet a clear definition of where consumers' responsibilities end.
"Full consumer responsibility is going to be very problematic," he said.
"What we mean by consumer responsibility has not been teased out adequately. We need a consensus on this."
Sants said the collapse of Northern Rock is an example of where consumers cannot be held responsible for the risk taken, as they could not have known about the risks within Rock's business model.
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Rock risks
The FSA didn't understand the risks posed by the NR model ... what hope did customers have!
Posted by: Donald
Sants Tells MPs
Before Hector is let put responsibility of any kind onto consumers he wants to be made to accept some himself. He and the FSA, B o E and politicians sat fiddling while the finances of this country were let go up in smoke. Banks throwing money at the public, buying and selling packages of loans/mortgages the contents of which they did not have a clue about, playing currency and stock markets with shareholders and the publics money. It could of course all have been down to the lack of mathematical skills of Hector, B o E etc. that he implies consumers suffer from. Now that I know Hector's M A was in Psychology and Philosophy that could well be the reason for the demise of our banking system. I bet Hector and his cronies will not accept any responsibility though.
Posted by: John Smyth
IS HE FOR REAL???
Is this man on drugs? Santsozene?, Hectorproprofol? Thanks Hector (or ‘Nero’) for your latest words of wisdom. (If you didn’t laugh you’d cry….) Yes - thanks for telling us that giving the client lots of information doesn’t improve consumer decisions’. Oh really? And the FSA had to conduct ‘research’ to establish this?. What a joke. This is where our money is going boys and girls. I suppose it must therefore follow that giving me ‘lots of information’ whilst I was studying for L4 on banking procedures and what is on the bloody agenda of the MPC doesn’t make me a better adviser either…..??? Well, it didn’t. I didn’t need to know it, I’ve never needed to know it in 25 years, and I’ll never need to know it. Despite me trying to continue treating my customers fairly during my studies, I just had a higher pending tray when I’d finished. I am merely a puppet regulated by a muppet.
Posted by: Keith Jayne
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Told you..
But Hector you muppet - whose bloody stupid rules caused all the paperwork that is issued to clients?
Posted by: Simon Webster