Cowboys and Consumers - Who rules the Finance Industry?

RSG Debates is a series of round table events held throughout the year, which bring together industry leaders who are relevant to a central topic of discussion. As Head of Sanderson's Financial Recruitment division, Tim Donaghy joined some of the UK's leading CFOs to discuss: Can Business Self Regulate? To find out more about future RSG Debate events and how you can participate, please click here.

Is the Financial Services Industry run by cowboys making rash decisions with the hard earned cash of the unsuspecting public, or is this an industry that is regulated and genuinely consumer/customer focused? 

The rules and conduct of people in responsible positions within The Financial Services Industry are well documented in the FCA Handbook and the theme of the handbook is indeed consumer and customer focused. I would recommend a quick read as it is very simply written and specific in its purpose. 

A quick look on the FCA website shows that there are indeed implications to breaking the codes of conduct. On the home page the following headlines jump out at you:

“FCA fines Guaranty Trust Bank (UK) Ltd £525,000 for failures in its anti-money laundering controls”

“FCA fines compliance officer and broker whose actions enabled market abuse to be committed in October 2010“

So, if the rules are plain and simple and implications of breaking the rules are obvious, why are there still breaches and why is consumer confidence so low? 

Is the punishment severe enough? Or does the punishment fit the crime (Fred Goodwin et al)?

How many people were imprisoned on the back of the meltdown in 2008, or at any stage for that matter?

When does incompetence become negligence?

Maybe the answer lies in the level of punishment; maybe it lies in the expectation on returns demanded by an often ill informed public, or maybe it lies with the well publicised bonus culture of the industry. What is clear and certainly stressed at the event is that the challenges are complex, no one group is to blame for recent issues and that plenty of questions remain unanswered.