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Many thanks to

for hosting:

"THE FCA's DUTY OF CARE DISCUSSION PAPER"

If you haven't been to a Transparency Symposium before you can use the link below to read some testimonials:

When and where is the event?

Registration is at 10:00 for a 10:30 start; ending at 15:00, with networking through to 15:30, at  Irwin Mitchell,

40 Holborn Viaduct, London EC1N 2PZ

 

 

What has inspired this symposium?

 

The Financial Conduct Authority has a single strategic objective which is to ensure that relevant markets function well. It also has 3 operational objectives, one of which is securing appropriate protection for consumers. 

 

The FCA has issued Discussion Document 18/5 on a duty of care and potential alternative approaches. The context is that some stakeholders have voiced concerns that the FCA’s regulatory framework, including their Principles, may not be sufficient or being applied effectively to protect consumers.

 

Some stakeholders have said that the introduction of a duty of care could reduce harm by requiring firms to avoid conflicts of interest, as well as supporting longer-term cultural change within firms. 

 

Other stakeholders have suggested that existing FCA rules already provide sufficient protections for consumers and impose the same requirements on firms that a duty of care would. 

 

Given these differing views and the strength of the concerns expressed, the FCA see it as important that there is an open discussion and debate about the potential merits of a duty of care; and to ensure they understand the consequences of any changes made. 

 

The FCA have a responsibility to consider, and be open to, alternative approaches that might address stakeholders’ concerns. They use the term ‘New Duty’ in the Discussion Paper to encompass a duty of care and alternative approaches. 

 

The purpose of the FCA’s Discussion Paper has been to:

 

  • Help understand whether there is a gap in their regulatory and legal framework, or the way it is applied in practice, that could be addressed by introducing a New Duty

 

  • Assess whether change is desirable and, if so, what form it could take, how it would work in practice alongside their current framework, and what consequences it would have for consumers, firms and the FCA

 

  • Better understand and consider possible alternative approaches that might address stakeholders’ concerns

 

  • Understand what a New Duty for firms might do to enhance good conduct and culture in financial services, and how this could influence consumer outcomes, alongside the Senior Managers and Certification Regime

 

The overall purpose of this symposium is to create an opportunity for all stakeholders to be able to converse with senior FCA executives directly involved with the Discussion Paper.

 

We hope to shine a very bright light onto the potential for profound progress to be made in financial regulation as a direct consequence of the FCA's New Duty Discussion Paper.

 

There will be a presentation by the FCA, talks by highly interested stakeholders, a panel session and ample scope for all delegates to participate in the discussion and debate. 

 

It is the view of the Transparency Task Force that this FCA initiative has the potential to initiate widespread positive reform of financial regulation in the UK; and if a new approach was successful in better protecting consumers here in the UK from harm, it could go on to influence other regulators around the world to move in a similar direction. 

 

Here’s an overview of the Transparency Task Force’s formal written response to the Discussion Paper:

 

Our current regulatory framework does not provide adequate protection for consumers because current regulation has not yet delivered the change required.

 

The extent and longstanding nature of consumer detriment indicates that cultural change is required within firms and the market as a whole. The existing Principles do not remove conflicts of interest and do little to deter firms from mis-selling products and services.

 

Furthermore, once poor conduct is found, consumers have to face a lengthy battle to obtain redress. If firms had a legal duty of care to customers, it would help achieve better outcomes in the first instance.

 

There has been persistent widespread malpractice in financial services for many decades; the Global Financial Crisis has been the most extreme manifestation of that malpractice. Given the severity of the consequences of malpractice we wish the Regulator(s) to have as much power as necessary to ensure malpractice is minimised moving forward.

 

Given that the FCA has a responsibility to consider and be open to alternative approaches that might address stakeholders’ concerns we believe the FCA should now move forward with introducing a New Duty and we propose that the New Duty should be a Fiduciary Duty as that would provide the consumer with the greatest protection from a sector that has been predisposed to malpractice and a profit before principle mindset for decades.

 

Where firms have an institutional structure that encourages rent-seeking and there is weak buyer power, abuse will continuously reoccur in new forms as markets innovate. We believe there is ample evidence suggesting that the pursuit of a micro rules-based approach is always likely to leave the FCA one step behind the problem. The term “regulatory whack-a-mole” comes to mind.

 

In contrast, a principles-based approach has the potential to change the way the sector operates systemically.

 

We therefore want the FCA to introduce an over-arching principle that mandates for the behaviour we want the market to default to i.e. to care for its customers’ interests.

 

We believe that the best way for this over-arching principle to be deployed should be through a New Duty.

 

We believe a Fiduciary Duty would be the best iteration of that New Duty as it would be the most potent protector of the consumer’s interests due to its weight in law.

 

The introduction of a Fiduciary Duty would enable the FCA to confidently enforce its pro-consumer objectives.

 

The successful introduction and application of a Fiduciary Duty could enable the FCA to drive a paradigm shift in financial regulation around the world.

 

The event is going to be a great opportunity to hear the views of the FCA and others; as well as to have the chance to get your thoughts across to. 

 

There are going to be many important questions and talking points such as:

 

  • Has the FCA been able to use Treating Customers Fairly and its Principles to effectively drive good market conduct? Or has there been a reluctance to enforce when there have not been rule breeches? 

 

  • What are the relative merits of a Duty of Care versus a Fiduciary Duty?

 

  • Could the successful introduction and application of a New Duty mark a major turning point in how the FCA regulates?

 

  • Should the FCA work with industry bodies to elevate conduct towards great? Perhaps an approach of “Regulation to get to good and Codes to get to great” could be the mantra? 

 

  • Could a New Duty, particularly if it were a Fiduciary Duty have the potential to drive the cultural transfusion that many decades of malpractice shows the sector needs?

 

  • Would an overarching New Duty, particularly if it were as robust as a Fiduciary Duty incentivise companies and the individuals that lead them to recalibrate their priorities; placing a greater emphasis on looking after their customers’ interests?

 

  • Would a New Duty erode shareholder value of firms in the sector or protect it?

 

  • Would the Global Financial Crisis have happened if a Fiduciary Duty had been enforced right around the world two or three decades ago?

 

  • Has a micro rules-based approach to regulation been largely ineffective at preventing widespread market abuse?

 

  • Given the obvious value-destroying reputational damage and regulatory fines caused by malpractice in the sector, would shareholders investing in financial firms be better off if they had to operate in a manner aligned to Fiduciary Duty?

 

  • Is there a serious gap in the FCA’s existing regulatory framework that could be addressed by introducing a New Duty?

 

  • Is the perception that the FCA tends to only enforce against breaches of its principles when firms have also broken the rules accurate or an unfair judgement?

 

  • Could a Fiduciary Duty synthesize diverse pinpoint regulations in to a strong investor protection baseline obligation that serves as a foundation for deterrence and compensation?

 

  • Would a New Duty help us to move from after-the-event micro rule-making to an environment that is inherently safer for the consumer by reforming the market systemically?

 

More specifically, could a New Duty:

 

  • Operate as a preventative measure to protect consumers, obliging providers of financial services to avoid conflicts of interest and act in customers’ best interests?

 

  • Promote responsible behaviour on the part of businesses, ensuring fairer outcomes for consumers (particularly the vulnerable) and an improvement in firm culture?

 

  • Protect bank customers from the consequences of Authorised Push Payment Fraud?

 

  • Finally put an end to Closet Trackers?

 

  • Remedy the regulatory arbitrage between contract-based pension schemes and Mastertrusts?

 

  • Make Independent Governance Committees independent and govern?

 

  • Overhaul the way the entire sector operates, positively recalibrating the standards of conduct throughout the sector and finally dealing with agency problems?

 

  • Be sufficiently clear, robust and straightforward that it could make obsolete many micro rules that would immediately become subservient to it? If so, would that open up the possibility of an exercise that could be undertaken over time to sweep away rules that were in effect obsolete and therefore unnecessary? If so, could the New Duty drive simplification and streamlining of the regulatory rulebook?

 

  • Significantly minimize the amount of regulatory arbitrage that exists today?

 

  • Make currency exchange companies discontinue using misleading advertising that suggests the customer will get a better rate than they actually will?

 

  • Make banks automatically provide customers with the best savings rate available to them?

 

  • Make insurers discontinue using pricing policies that unfairly apply a loyalty penalty?

 

  • Make pension companies discontinue the scandal of failing to provide low earners with the tax relief they are entitled to because of the Net Pay/Relief at Source issue?

 

  • Help prevent the misuse of “sophisticated investor” status as a means of reducing investor protections?

 

  • Incentivise compliance and therefore reduce the occasions of investors calling for redress?

 

Clearly, there is going to be a great deal to discuss!

What's the programme?

 

  • 10:00 - Registration and refreshments

 

  • 10:30 - Welcome to the event by Sarah Ducker of Irwin Mitchell

 

  • 10:35 - Andy Agathangelou to introduce the Transparency Task Force and set the scene for the symposium

 

  • 11:00 - Sarah McKenzie, Head of Consumer Strategy and Policy, Financial Conduct Authority

 

  • 11:30 - Tim Gosling, Head of Pensions Policy, B&CE The People’s Pension

 

  • 11:50 - Presentation of the Transparency Trophy 

 

  • 12:00 - Lunch and networking

 

  • 13:00 - Open discussion for the whole group; incorporating short speaking slots by:
    • Iain Pickard, Co-Founder, Strategia Worldwide
    • Dr. Kara Tan Bhala, President and Founder, Seven Pillars Institute for Global Finance and Ethics
    • Bob Ward, Director, Pascali
    • JB Beckett, UK Director, Association of Professional Fund Investors
    • David Stripp and Bob Compton, Leaders of the TTF’s Market Integrity Team

 

  • 15:00 - Refreshments and further networking

 

  • 15:30 - Symposium closes

What's the format going to be?

 

To provide the maximum opportunity for all delegates to get fully involved we have structured the event around presentations with Q&A which will help create a useful forum for sharing thought leadership and exploring ideas to help improve the way we think about regulation moving forward.

 

There will be a presentation by the FCA, talks by highly interested stakeholders and ample scope for all delegates to participate in the discussion and debate.

Who shouldn't miss this symposium?

 

This symposium is going to bravely attempt to deal with questions of immense importance to everybody interested in the costs and charges debate. We're expecting it to be a very stimulating, engaging and thought-provoking session of very special importance to

 

  • Compliance professionals

  • Risk managers

  • Industry leaders

  • Consumer groups and individual consumers

  • Regulated firms

  • Policy-makers and regulatory bodies

  • Industry experts

  • Think tanks

  • Asset Managers and Investment Consultants

  • Pension Trustees; professional and lay 
  • Industry Observers, Commentators; the Media in General
  • Academics and researchers
  • Pensions Policymakers and Regulators; UK and overseas
  • Pension scheme trustees; professional and lay
  • Parliamentarians with an interest in pensions, asset management and financial services reform
  • Members of the Department for Work & Pensions
  • Members of the Financial Conduct Authority

  • Members of the Competition & Markets Authority

  • Members of the Work and Pensions Committee 

  • Compliance Professionals

  • Legal Professionals

  • Pension Professionals

  • Financial Services Trade Bodies and Professional Associations

  • Academics and researchers in governance, stewardship, ethics, conduct and compliance in financial services
  • Civil Society Groups with an interest in financial services reform; and many more...

Key participants thus far

(Several others being added soon)

Sarah McKenzie,

Head of Consumer Strategy & Policy,

Financial Conduct Authority.

 

Sarah’s responsibilities include ensuring the FCA has a good understanding of consumers in financial services - their needs, behaviours and the harm they may face - and supporting the wider FCA in fulfilling its consumer protection objective. 

 

Sarah has over 15 years’ regulatory experience across various disciplines including supervision, projects, policy and market-focused work in retail and wholesale competition.  

 

Sarah’s work has had a consistent focus on identifying harm and delivering significantly better outcomes for consumers. Recent priorities have included implementing remedies to tackle the issues identified in the asset management market study and a period leading the FCA’s flagship Innovate team which aims to encourage beneficial innovation in financial services. 

 

Sarah started her career at Lloyds TSB, firstly as a graduate trainee before moving into management roles.

Neil Esslemont, 

Head of Industry Liaison,

The Pensions Regulator

 

Neil and his team are responsible for engaging with employers, pension providers, payroll providers and other suppliers of pension related products, services and advice.  Our aim is to help them fully understand the rules around workplace pensions, including their own or their client’s duty to automatically enrol eligible workers into a pension scheme - and the duties of pension scheme managers / trustees, in both public and private sector.

 

Neil has over 30 years’ experience in dealing with large companies in the private and public sectors. 

 

Neil has previously worked as a client director for BT and Siemens, and as a management consultant for PriceWaterhouseCoopers.

 

Neil has a technology background in computer software engineering, gained after graduating from Exeter University with a Maths & Physics BSc.

Iain Pickard,

Co-Founder,

Strategia Worldwide

 

Iain Pickard co-founded Strategia Worldwide in 2016.  Iain is a former COO of Marsh’s UK domestic business, COO of a leading Lloyds of London broker, Change Director for AON’s wholesale/specialty division, Operations Director of Aspen Re, Head of Financial Services at RSM – the global advisory firm – and a UK Financial Conduct Authority authorised ‘Skilled Person’ for Risk and Governance.  

 

He has advised a wide variety of FS firms on managing regulatory risk and, latterly, was COO/CRO of a London based Fintech firm.  

 

Iain focuses on all aspects of the operations of Strategia Worldwide enabling its strategic growth and also managing complex projects and service delivery for our clients.  He fuses 20 years of military experience of campaign planning with relevant financial, insurance and commercial risk management experience.

Tim Gosling,

Head of Pensions Policy,

B and CE, Provider of The People's Pension

 

Tim Gosling is head of pensions policy at B and CE, provider of The People’s Pension.

 

Tim has spent much of the last decade working on pension policy, with a particular focus on automatic enrolment. Before joining B and CE Tim was the policy lead for DC pensions at the Pensions and Lifetime Savings Association.

 

Prior to that Tim worked in the strategy team at NEST Corporation and as a researcher at the Personal Accounts Delivery Authority.

 

Tim began his career in policy analysis at the Institute for Public Policy Research looking at pension policy and public service reform. He has degrees from the University of York and the London School of Economics. 

David Stripp,
Proposition Manager,
David Stripp Limited
 

David is a Lead on the Market Integrity Team (MIT) of the Transparency Taskforce. He has project managed the MIT’s 18 month project on Codes of Conduct & Codes of Ethics in Financial Services which has resulted in their White Paper released in July 2018.

 

With a background in pensions & benefits David spent over twenty years with Marsh and Mercer managing the SW region of Mercer Employee Benefits, and latterly in a proposition development and project & change management role.

 

Since 2011 David has worked with leading banks, insurance companies and national IFA firms developing propositions that have focused on aspects of governance and bringing change to the delivery of financial services. Projects managed have included developing and bringing to market a new workplace pension offering for SME clients of Mercer; building a product governance framework for a leading insurance company; defining an Operational Risk Management model for a national IFA firm; developing a governance proposition for Auto Enrolment clients of Barclays Corporate & Employer Solutions; developing a DB to DC proposition for a leading IFA firm; and developing a benefit package to sit alongside Auto Enrolment.

 

David also acted as Co-Chair of the Friends of Auto Enrolment Governance Task Force, playing a large part in the drafting of their Guide to AE. 

Bob Compton,

Managing Director               and Co-Owner,

ARC Benefits Ltd

 

ARC Benefits is a UK- based firm providing independent pensions management and governance services. ARC have developed a leading edge pensions management and governance system for workplace pensions.

 

Bob has

  • Over 40 years of experience in the Company Pensions Industry, having worked for leading Insurance Companies, Brokers and Actuaries
  • Specialized in strategic corporate advice and has designed and established many new pension funds, often with leading edge design, including an Industry wide scheme 
  • Established and sold a joint venture IFA firm and a joint venture with an Independent Actuarial firm
  • Been the Secretary to Trustees of a £700m pension fund
  • Since 2006, been instrumental in developing a cutting edge pensions management and governance platform
  • Co-authored a book on Pensions Management, published in 2011
  • Authored a chapter in the Institute of Directors book on Workplace Pensions published in 2016
  • Provided input and ideas to the CBI, OPRA, TPR, PPF and the DWP
  • Acted as the pension policy advisor to the British Chambers of Commerce 
  • Established the Independent Professional Trustee Group in 2003, now known as the Association of Professional Pension Trustees.
  • Enjoyed membership as a Fellow of both the Chartered Insurance Institute and the Pensions Management Institute, and holds the IIMR certificate on Investment Management, and the PMI Trustee certificate
  • Completed a “mini” MBA at Aston Business School in 2016
  • Been a long-standing committee member of the East Midlands PLSA
  • Been a Fellowship Network Ambassador for the Pensions Management Institute since launch in 2016, to lead high level discussions on key industry issues
  • Been part of the management team of the Market Integrity Team of the Transparency Task Force, developing its Codes of Conduct initiative since 2017
  • Been awarded the Transparency Trophy in March 2018, for work on the TTF Market Integrity Team

Dr. Kara Tan Bhala,

President and Founder,

Seven Pillars Institute for Global Finance and Ethics

 

Dr. Kara Tan Bhala is President and founder of Seven Pillars Institute for Global Finance and Ethics, the world’s only independent think tank for research, education, and promotion of financial ethics. The Institute was shortlisted in the Prospect Think Tank Awards 2016.

 

Kara has over twenty-three years in global finance and is lead author of International Investment Management: Theory, Ethics and Practice, one of the first books to provide a comprehensive understanding of investment principles, synthesize three theories of finance, and apply ethics in financial practice focusing on Asian cases. She was named by Ingram's as one of the "50 Kansans You Should Know".

 

Kara has five degrees across three disciplines and has lived in London, Oxford, Singapore, Hong Kong, New York, and Washington, D.C.

JB Beckett,

UK Director,

Association of Professional Fund Investors,

 

JB is a veteran fund selector and strategist. He is a Fund Gatekeeper for Scottish Widows, a large UK insurer and pension provider.

 

He is a recognised thought leader in the fields of fund analysis, research and governance and author of the controversial book ‘#NEWFUNDORDER’. JB is a columnist, lecturer and global presenter on a variety of fund management and digitalisation topics.

 

The Association of Professional Fund Investors (APFI) is dedicated to the pursuit of professionalism in fund investing. In addition to his role at the APFI, JB's senior portfolio includes: consulting CIO, Chartered Member, Author and Senior Reviewer for the Chartered Institute for Securities and Investments, and member of the Z/Yen Long Finance think-tank.

 

JB is a member of several Transparency Task Force Teams, most recently Team PISCES.

Bob Ward,

Director,

Pascali

 

Bob is an avid pension member champion with over 35 years’ experience in operations and management of corporate pensions for DB and DC and wider protections and investment operations across Financial Services.

 

With a grasp of IT processes, he has initiated improvements and innovative solutions. He has been at the forefront of major innovations in the financial services sector, covering real-time point of sale transactions, latest payroll to pension API, RTI and design of auto enrolment administration through the creation of a Master Trust. He brings together the knowledge of a qualified IFA, Project management, Trusteeship and IT end user engagement to enhance the standards and member experience.

 

Through his participation of the Friends of Auto Enrolment and Pension Playpen, plus a recent contract with the FCA on IGC and GAA governance, Bob strives to improve member outcomes affected by scams and tax relief inequalities and encourages trustees and scheme managers to seek better solutions.

Andy Agathangelou FRSA,

Founding Chair,

Transparency Task Force

 

Andy will be Chairing the Symposium. His overall objective is to galvanise support for the idea that greater transparency in financial services can drive positive, transformational change for the benefit of all.

 

 

Andy formed the Transparency Task Force following a meeting he led at Senate House, University of London on 6th May 2015. The meeting was the about the trust deficit that is impacting financial services and how harnessing the transformational power of transparency can drive the change that is needed.

 

That meeting set off a chain of events that led directly to the creation of our collaborative, campaigning community which is built on the idea that 'Sunlight is the Best Disinfectant'. 

 

Since 6th May 2015 he has recruited, organised and mobilised over 300 volunteers around the world into 13 Teams: 

 

 - The Banking Team

 - The Foreign Exchange Team

 - The Market Integrity Team

 - The Costs & Charges Team

 - The Scams & Scandals Team

 - Team PAM (Progressive Asset Managers)

 - Team PISCES (Purpose; Impact Investing; Sustainability; Corporate Social Responsibility; Environment, Social & Governance; Socially-Responsible Investing)

 - The Financial Stability Team

 - Team APAC

 - Team EMEA

 - Team Americas

 - Team GTI (Global Transparency Index)

 - The AE Team 

 

Our 13 Teams are the 'engine room' of the Transparency Task Force's work. Each Team is focused on a particular set of opacity-related challenges whereby subject-matter experts work together on a completely voluntary basis to develop and implement strategies to overcome those challenges.

 

 Andy is also:

  • Founding Chair, the Technology Task Force
  • Chair, the Interoperability Steering Group
  • Governor, Pensions Policy Institute
  • Fellow, the RSA
  • Chair, Pensions BIB,
  • Member, Investment Association Advisory Board on Cost Disclosure
  • Former Founding Chair, Friends of Auto Enrolment
  • Former Founding Chair, Friends of the Association of Member Nominated Trustees

Please click on the PDF icon below to download the slides that were used at the event.

Slides used at: "Time for Transparency - The FCA's Duty Of Care Discussion Paper"
TS London 14th November.pptx
Microsoft Power Point presentation [11.9 MB]
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