2017年-FCA英国金融行为监管局_fsa_rcro_96页_4mb

Retail Conduct Risk Outlook Summary

Core Content

The Retail Conduct Risk Outlook (RCRO) is a report by the Financial Services Authority (FSA) that outlines the current, emerging, and potential risks to consumers arising from poor conduct by financial services firms. It is part of the FSA's enhanced Consumer Protection Strategy, which aims to improve the retail market for consumers, prevent conduct risks beyond acceptable levels, and ensure prompt and effective redress.

The report is structured into two main chapters: The Environment and The Risks, with additional sections on scope, equality, and future directions. It focuses specifically on retail conduct risks—risks that arise from firms' direct interactions with consumers—and excludes wholesale risks and financial crime risks.

Main Points

1. Consumer Needs and Firm Behavior

• Financial services firms must cater to a wide range of consumer needs, from basic utility functions like bill payments to more complex financial planning.
• Consumers have varying levels of financial sophistication and needs, with some requiring professional advice and others seeking simplicity and security.
• Firms may face challenges in adapting to the macroeconomic environment and new regulations, which could lead to conduct risks such as poor service, mis-selling, and inadequate product suitability.

2. Macroeconomic Background

• Household income remained relatively stable during the recession, with modest real growth.
• Savings rates initially increased due to economic uncertainty, but declined as consumer confidence improved in 2009 and 2010.
• Debt levels remain high among many households, increasing vulnerability to future economic shocks.
• Low interest rates have affected different consumer segments differently: those with significant net positive cash positions have seen reduced disposable income, while mortgage borrowers have benefited from lower interest expenses.

3. Regulatory Developments

• The FSA has introduced new regulations, including the Retail Distribution Review (RDR) and Solvency II, which are expected to significantly impact the life insurance and banking sectors.
• Regulatory changes are pushing firms to rethink their business models, which may introduce new risks if not managed properly.
• The Consumer Protection Strategy now requires the FSA to be more proactive and interventionist in addressing retail conduct risks.

4. Firms and Product Supply

• Banks are under pressure due to low interest rates and competition for retail deposits. Some are shifting to premium products or cost-cutting strategies.
• Asset managers are introducing more complex investment products to meet consumer demand for yield in a low-interest environment.
• Life insurers are adapting their models to address changing consumer needs, especially in the pre-retirement market, and are responding to regulatory changes.
• Intermediaries have seen a decline in numbers, especially in mortgage broking, while general insurance intermediaries have continued to grow.

5. Consumer Behavior and Segmentation

• Consumer behavior is influenced by age, financial status, and risk preferences. Older consumers are more affected by falling interest income, while younger or more affluent consumers may be more affected by changes in interest rates or product complexity.
• Segment-specific effects include:
  • Income distribution and the impact of financial assets ownership.
  • Divergent effects of low interest rates on different customer groups.
  • Differences in risk/return preferences among consumers, especially with low returns on low-risk assets.
  • Vulnerability of retirees to changes in firm behavior and product design.

Key Risks Identified

1. Current Issues

• Unfair mortgage contract terms and poor treatment of customers in arrears.
• Mis-selling of structured investments and deposits.
• Inadequate complaints handling in major banks.
• Payment protection insurance (PPI) and concerns over new or substitute products that may pose similar risks.

2. Emerging Risks

• Implementation of the RDR and Payment Services Directive may lead to widespread disengagement with regulatory frameworks.
• Changes in business models due to RDR may introduce new conduct risks.
• Weaknesses in adviser networks regarding control and oversight.
• Growth of platforms in the financial services market, which may bring new risks.
• Staff reward policies that could incentivize misconduct or poor product design.

3. Potential Concerns

• Fees-based income models in banking, especially in private banking and wealth management, may lead to consumer detriment.
• Bundling of products could result in increased complexity and poor consumer understanding.
• Cross-selling practices may lead to mis-selling or product design issues.
• New business models post-RDR may introduce unexpected risks for consumers.

Supervisory Focus

• The RCRO informs the supervisory focus of the FSA and its successor bodies, the Financial Conduct Authority (FCA).
• The report aims to increase awareness of risks and prevent widespread consumer harm.
• It encourages dialogue with both firms and consumer groups to address issues early and proactively.

Scope and Limitations

• The RCRO is not about wholesale risks or financial crime.
• It does not cover macroeconomic risks (e.g., rising interest rates affecting mortgage affordability) or market structure risks (e.g., competition affecting product availability).
• It also excludes unsecured credit risks, which are under the jurisdiction of the Office of Fair Trading (OFT).

Equality and Diversity

• The public sector equality duty is taken into account in considering policy, supervisory, and enforcement actions.
• While the document does not explicitly address risks for minority groups, it acknowledges the importance of equality of opportunity and fair treatment in financial services.

Future Outlook

• The FSA aims to identify risks earlier and reduce consumer harm through its strategy and the RCRO.
• The report is intended to inform ongoing supervisory activities and policy development.
• It sets the foundation for ongoing risk monitoring and regulatory intervention in the retail financial services sector.