A great article in Investment Week noted that “The Financial Conduct Authority (FCA) has said it is ready to intervene on the use of language confusing to consumers, if the industry does not develop a credible solution.
The regulator made the comments in its response to a report from the work and pensions committee which investigated the liberalisation of the pension market in April 2015.
It said the use of jargon and technical terms in communications to consumers made it difficult for them to understand the information and needed to be changed.
The FCA also criticised the emergence of new terms such as UFPLS in the wake of the government pension reforms, which further contributed to the problem.
It said it was committed to an industry-led solution to the problem, but stood “ready to act” along with government “if this does not prove forthcoming”.
The regulator had been challenged by MPs on the pensions select committee on its rules for language used in communications.
In response, the FCA said it had raised the issue of jargon usage in its smarter communications discussion paper last June and had challenged the industry to look at their language and reducing jargon”.
So, the best ‘interventions start at home FCA.
In December we heard that the regulator had set out how adviser business models will be tested.
They were quoted as saying the guidance is not specific or exhaustive. then added: “Although a specific business model threshold does not currently exist, when assessing a firm against the threshold conditions as a whole, the FSA does ask for information about a firm’s business model.
“Therefore the revised threshold conditions, which now include a specific business model threshold condition, make explicit what is already implicit and as a result we believe our new business model guidance reflects existing practice.”
Who wrote this, why and someone, anyone, please explain what this means.
I think that this statement must qualify as one of the very worst examples of regulatory “W Cubed” speak- the unrealistic claim that your company can deliver whatever, wherever, whenever it’s needed to the regulator.
We also highlighted concerns some while ago that regulation and the various diktats and tomes that accompany it would benefit from being put into plain English.
So when we saw this from the FCA “Behavioral biases can render regulatory interventions aimed at addressing information asymmetries harmful” heads were banged on desks!
I thought it was worth sharing the above on this very topic with you.
In regulation understanding is everything and the starting point is guidance in plain, easy to understand non-“newspeak” English.
The English language today is being highjacked by some crazy versions of “newspeak” and this was a prime example of it.
We live in a society where we no longer have snow drifts – we have accumulations, we no longer have rainfall- we have precipitation, we no longer have fire brigade or ambulance- we have first responders, we no longer have customers- we have consumers.
Your views may well differ, if so, we would like to hear them.