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Who Regulates the IFA Sector – An Overview of the Ethics & Regulation that Guide the UK’s Financial Advisory Industry

Put simply, the aim of the FCA is to regulate the UK’s financial services and broader market in a way that adds the most benefit to those that are seeing to access or use financial services. Any firm offering financial products or imparting professional advice must be fully regulated and registered with the FCA.

Prioritising the consumer, the FCA uses a series of regulatory frameworks which not only regulates the actions of financial service providers, banks and IFA’s but provides a strict advisory structure that gives the consumer efficiency, transparency as well as fair advice and service access.

Covering some 59,000 UK financial firms, the FCA sets stringent standards that are aimed at making the markets work well and efficiently – for individuals, large and small firms as well as the economy as a whole the FCA has a dedicated oversight to safeguarding the conduct of our financial markets and consumer finance.

Established in 2013, the FCA is an integral part of the UK Government economic strategy and provides the framework in which our IFA’s, banks, building societies and other service providers operate.

 

Why is an Oversight Needed?

Given the ongoing COVID-19 pandemic, the health of the economy is of paramount importance to the wellbeing of the nation.

A key component of this is to ensure that consumers have an equality of access to the right and regulated financial advice. From children’s ISAs to investments, mortgages and pensions to insurance, getting the right advice, products and services ensures that both the provider and consumer are protected.

Employing over 2.2 million people and contributing some £65.6 BN in tax revenues to the wider the UK economy, the FCA ensures that the markets operate exactly as they should to benefit consumers, companies and the wider economy. In short the strategic objective of the FCA is to ensure that the markets and financial firms function to protect:

  • Consumers – The FCA secures an appropriate degree of protection for consumers.
  • Financial Markets – Adequate protections in place to enhance the integrity of the UK financial system.
  • Promote Competition – Effective market competition is in the interests of consumers.

The FCA is an independent public body that is funded by the firms that it regulates and the work of the FCA is defined by the Financial Services and Markets Act 2000 (FSMA). With a broad remit the FCA works with consumer groups, trade associations and professional bodies, domestic regulators, EU legislators and a wide range of other stakeholders.

The Pensions Regulator

The Pensions Regulator (TPR) is the public body that protects workplace pensions in the UK. The TPR  works with employers and those service providers running pensions so that people can save safely for their retirement – they also act as point of recourse for pensions related complaints.

The TPR’s stated aim is to act as a strong, visible regulator that can help inspire confidence in the pensions system. The TPR’s key responsibilities include:

  • Ensuring employers put their staff into a pension scheme and regularly pay money into it (known as ‘automatic enrolment’)
  • Protecting people’s savings placed in workplace pensions
  • improving the way that workplace pension schemes are run
  • Reducing the risk of pension schemes ending up in the Pension Protection Fund (PPF)
  • Making sure employers balance the needs of their defined benefit pension scheme with growing their business

Furthermore the stated TPR’s 2020-2021 priorities are to:

  • Support workplace pensions schemes to deliver benefits through significant change driven by the global pandemic
  • Protect pension savers across all scheme types through proactive and targeted regulatory interventions
  • Provide clarity to, and promote the high standards of trusteeship, governance and administration we expect
  • Intervene where appropriate so that defined benefit schemes achieve their long-term funding strategy and deliver on pension promises
  • Ensure jobholders have an opportunity to save into a qualifying workplace pension through automatic enrolment
  • Continue to build a regulator capable of meeting the future challenges we face

About the Pensions Regulator: The TPR is a public body sponsored by the Department for Work and Pensions (DWP). is based in Brighton and has around 500 staff. The TPR works closely with the Financial Conduct Authority who regulate personal pension schemes. The TPR also work closely with other public bodies including:

In short the TPR provides the oversight and vehicle to monitor and regulate your pensions – for all further information please visit https://www.thepensionsregulator.gov.uk