The Financial Services Consumer Panel Today Launched Its First Annual Report

"This looks at how the fledgling Financial Services Authority has been performing while it is taking over as the main regulator of financial services in the UK," said Barbara Saunders, Chairman of the Financial Services Consumer Panel.

"It has made a promising start but needs to work even harder at protecting consumers, taking consumers' views more seriously and establishing the FSA as a well known brand in households throughout the land."

The FSA is working in an area where few consumers are confident or knowledgeable about financial products and financial advisers may not explain things well. In a survey of over 1,200 consumers specially conducted for the Consumer Panel by MORI it was found that:

• few consumers shop around for investment products - one third of people in the survey looked at only one product provider;
• around one in five financial advisers did not explain charges and commission levels well;
• almost one in three consumers did not feel confident about trusting banks and insurance companies with their long-term savings. And almost one quarter felt that long-term savings in the UK were not secure - this proportion has doubled in the last two years, perhaps because of the publicity about shortfalls on endowment policies and mis-selling of pensions.

"In the light of this the FSA has a tough job to do," said Barbara Saunders.

"Only 6% of people in our survey could name the FSA as an official watchdog for financial services and the same small percentage could name the FSA as the place to go to check that a financial adviser is properly qualified or registered - so there is an enormous consumer education task in front of them."

The Consumer Panel has published 19 consultation responses and parliamentary submissions on the legislation setting up the new financial regulator in its first year, as well as providing much 'behind-the-scenes' policy advice to the FSA's Board and staff.

1. The Financial Services Authority established the Consumer Panel to advise the FSA Board on the interests and concerns of consumers and to report on the FSA's performance in meeting its statutory objectives. There are eleven Panel members, representing a broad range of consumer interests. The Panel is independent of the FSA - it can raise its own concerns, initiate its own research and publish its own reports.
2. Survey fieldwork was carried out between 15 October - 17 November: MORI 1999.
3. The Government's intention, as set out in the Financial Services and Markets Bill, is that the FSA should be a single statutory regulator of financial services business with four statutory objectives - maintaining market confidence, promoting public awareness, protecting consumers, and reducing financial crime.
4. The current regulatory regime consists of ten regulators. Until the new laws are passed, the existing organisations will continue to be in charge of their own areas of the financial industry.
5. The Bill to form the single regulator is currently before the House of Lords and is expected to receive Royal Assent during the first half of 2000.
6. Copies of the full Annual Report and a four page summary will be available from the FSA Publications Department on 020-7676 3298 or from the website at www.fs-cp.org.uk