Pinning FT Adviser's accuracy in predictions on the rule-of-thumb that a broken clock is right twice a day, I'm returning to one of my favourite subjects: Is the FCA a price regulator after all?
For many years the topic of price setting or price regulation has been ticking along in the background, coming to the fore after occasional comments from the City watchdog (timepiece pun intended) about what it considers to be fair or reasonable levels of remuneration.
Commentators have in the past warned that despite repeated statements from the regulator that it is not setting prices, there's a Gertrude-like undercurrent of protesting too much.
The alarm bells have been ringing again, this time after a speech earlier this week (February 20th) on the success so far of consumer duty and next steps for financial services companies.
This was set out by Sheldon Mills, executive director of consumers and competition for the FCA, when he said: "We do not set prices: Our job is to make sure that markets can work well".
He added that markets cannot work well if products and services fail to offer fair value, or if they offer features that lead to foreseeable harm.
Notice Mills did not say: "We do not set prices, but our job is to make sure that markets can work well".
A lesson in coordinating conjunctions
In the glorious convoluted way in which the English language operates, a colon can take the place of a but (yes, yes, cue sniggers from some readers).
Basically, a semi-colon can often replace a coordinating conjunction, such as 'and, but, or, so, therefore'. Rarely, as it is not considered proper, a colon can be used in the same fashion - namely to qualify the first part of a sentence by means of the second part of a sentence.
For example: "I'm not saying she's a rubbish writer; her editorials are long and laborious". The context implies the 'but'.
Consider the context, therefore, of that sentence in the speech given this week.
The FCA states it does not set prices; in the same breath it reinforces its role to make markets work well, going on to explain that it can only ensure markets work well if there is fair value on products and services.
It might not be a price setter, but the watchdog is effectively a regulator of prices by means of a focus on 'fair value'.
This has been happening for a long time, if you care to look back long enough through FT Adviser's articles on 'price regulator'.
Let us not omit to mention: the cap on payday lending; caps on bankers' bonuses; the focus on wealth management fees; the reviews into insurance commissions; reviews into the charges on drawdown and reviews suggesting robo can help bring down the cost of advice.
