Pimfa would have "strong words" to say to the Treasury if it were to bring in price regulation in financial services, according to the chief executive of the advisory trade body.
Liz Field, who became Pimfa chief executive in 2014, said it was unlikely that government would intervene in price-setting regulation, but warned "if the FCA is to become a price regulator, we would be having a lot of things to say.
"Pimfa would be saying a lot of things to the Treasury and to the Treasury select committee."
Her comments came amid fears that chancellor Jeremy Hunt's meeting with the heads of various regulators last month could lead to price regulation across several economic sectors.
But Field said if it did come to pass, price regulation would only be a worry if financial services "hadn't looked at defining fair value for their customers" as outlined in the incoming consumer duty rules.
She added: "If you are transparent on all levels, and can evidence fair value, then questions of price should not worry you. Some firms have gone through everything and can say 'this is what X costs'.
"Others are less rigid but as long as advisers can justify and show what value they are bringing to a client, then they don't need to worry about price."
Not a price regulator
As written previously in FTAdviser, the FCA has always said it is not a price regulator, although it is concerned with protecting consumers, promoting fair value through regulation such as the consumer duty - and ensuring fair competition.
But there were concerns that a meeting on June 28, where the chancellor chaired a roundtable with chief executives from the Competition and Market Authority, the FCA, Ofcom, Ofgem and Ofwat, might usher in price regulation across markets.
The meeting, according to HM Treasury, was part of the government’s plan to halve inflation this year, which at the end of May was 8.7 per cent, with the Bank of England raising rates further in June to try to tackle inflation.
During the meeting, the Treasury said: "Hunt made clear his expectation that regulators work at pace to guarantee markets are working properly.
"With wholesale energy prices and other input costs now beginning to fall – the chancellor also wants to ensure consumers benefit from these reduced costs.
"During this current period of high inflation and interest rates, this also includes ensuring higher interest rates are passed on to savers."
While this was aimed largely at the energy and utility companies, the FCA was tasked at the meeting with requirements to look at lenders and savings providers, such as banks.
The chancellor asked the FCA to:
- Deliver better deals for savers by driving competition, including reporting by the end of July on how the savings market is supporting savers to benefit from higher interest rates.
- Require the largest banks and building societies as part of this to explain the pace and extent of their pass-through of interest rates, and how they are proactively supporting savers to switch to high interest rate products.
The Treasury also said: "The government fully supports the FCA’s review and the new consumer duty gives them stronger powers to take action if necessary."
