As the FCA considers responses to its consultation on the regulator’s Approach to Authorisation, CEO Jason Wassell looks back on the experience for CFA members.
The FCA has been busy recently and one of many consultations has been on their authorisation process. This has stirred up sector discussions about the journey many firms went through and what we all learned.
I would argue that authorisation was crucial for CFA members, and that it is important that the FCA continues to give this process the priority it requires in the future. This should never be just a technical process, it is an opportunity to get things right from the start of a relationship.
In our consultation response on authorisation, we relayed back some of our experience of the process. This differed across our member companies, but there are certainly improvements that could be made to communicating progress.
It is also vitally important that case officers are familiar with the sector that an authorisation application relates to, or at least understand the customer need.
When I speak to stakeholders outside of the sector, they will often ask about the impact of the price cap on HCSTC introduced in January 2015. It is sometimes seen as the catalyst for change. Of course, the price cap did introduce a commercial restriction, certain lending decisions were no longer viable.
However, I would argue that authorisation, rather than the price cap was responsible for the changes we saw. Business models were changed, new leaders joined firms and the market started to adapt. We began to see a real change in culture.
Our experience suggests that authorisation is a key step in a firm’s relationship with the regulator.
For the FCA there is the chance to better understand the market they are regulating. An opportunity to potentially challenge their perceptions of what financial services should look like, and who can access these services.
This journey turned around our sector and it is important that the FCA continues to get this process right.