The Financial Conduct Authority (FCA) have long had the view that principles based regulation achieves fairer outcomes and have recently used an initiative to bring this to the attention of financial advisory firms.

At Heritage Wealth Solutions, our financial planners consider this fundamental to our dealings with Yorkshire-based clients. That’s because as chartered financial planners, we are able to view the pros and cons of our advice and ensure, on balance, our solutions best meet client needs.

The FCA’s Treating Customers Fairly Initiative

Principles-based regulation

In the past, detailed rules have not always delivered the outcomes they were supposed to achieve. This is because detailed rules cannot cover all circumstances and eventualities. We cannot hope to devise a set of detailed rules to cover all types of business and all types of firm; and we cannot expect detailed rules to be responsive to market innovations and structural changes. A rule-based system will always be trying to catch up with the market, writing yet more detailed rules to address yesterday’s problems.

Detailed rules also tend to address processes and not outcomes. This can encourage a narrow approach to compliance with a focus on the letter of the rule and not the spirit.

So our experienced financial approach is to tackle the root causes. That is why we want to shift the balance more towards high-level requirements and away from detailed rules. And we want to make this shift not only in terms of regulation, but also – and more importantly – in the way that both we, and firms, behave. As such, a principles-based approach challenges both firms and regulator to focus on the outcomes that really matter.

Source: FCA website

To read the full article please click on the following link.

If you are based within Leeds, Wakefield or the surrounding Yorkshire area and you would like to speak to our financial advisers on their aim to treat customers fairly, please do not hesitate to contact us on 0113 350 2080. For more information on the financial services we provide, including investments, pensions and retirement planning, click here.

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