FCA Staff Behaviour Needs to Change if it Wants to Encourage Growth

In a column for FT Adviser, London-based insurance partner Steven Francis provided an overview of how staff at the Financial Conduct Authority could take a different approach to client relations to promote growth and decrease regulation.

Francis noted that many issues lie in the day-to-day, public-facing roles in the FCA, such as authorisations and supervisory staff, many of whom take an excessive attitude to somewhat low losses for clients. 

“[C]lients ask me whether I’m seeing a change at the coalface of the FCA; is it possible to detect a pro-growth attitude in day-to-day interactions with supervisors?” Francis asked. “And the answer is that I’m really not. The behaviours are the same.” 

In closing, Francis said that the FCA could take a more pro-market approach to its duties by changing communication and behavioral styles among staff. 

“Twenty-five years ago, when self-regulation prevailed, there were not any regulatory lawyers,” Francis said. “Now they are common, thriving in the uncertainty that UK regulators create. Staff leave the FCA and then head to private practice, because (the view is) reading the FCA is a skill that only an insider has. This was my own pitch 20 or so years ago. Viewed in this way I wonder whether it is agency effects that drive current behaviour — whether conscious or not — and FCA staff simply behave in a way which heightens their long-term value and relevance in the labour market.”