Managing my financial journey
Managing my financial journey

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Managing my financial journey

Week 4: Regulation and consumer protection

Introduction

The focus of this final week of Managing my financial journey is on how regulation works and how it is intended to protect the consumer – by ensuring the financial solidity of financial firms and by requiring firms to have procedures in place to ensure that product sales are conducted properly.

In the event that things still go wrong, the regulatory environment has additional safety nets, including a complaints system (Financial Ombudsman) and a compensation system (Financial Services Compensation Scheme).

You will also look at the work that advisory organisations, like the Money Advice Service (MAS) and Citizens Advice, undertake to help the public when it comes to financial management and guidance on financial products.

You will finish the week, and the course, with an extended test to assess your knowledge across each of the weeks of Managing my financial journey.

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Transcript

MARTIN UPTON
Hello again and welcome to the last week of Managing my financial journey. In this final week we explore how regulation works and how it is intended to protect the consumer - by ensuring the financial solidity of financial firms and ensuring that product sales are conducted properly.
The subject of regulation is both topical and controversial. The need for the rescue of Northern Rock Bank, the Royal Bank of Scotland and Lloyds Banking Group (after it had taken over the beleaguered Halifax Bank of Scotland (also known as HBOS)) during the financial crisis was, in part, the consequence of the failure of effective regulation by the Financial Services Authority.
The repeated episodes of mis-selling to consumers - most exemplified by the Payment Protection Insurance (PPI) scandal - has highlighted systemic failures in customer protection.
Since the financial crisis the regulatory framework has been completely overhauled, as we saw in Week 2. Additionally new safeguards for consumers have been introduced through the Retail Distribution Review (or RDR) and the new 'conduct risk' requirements for financial firms laid down by the Financial Conduct Authority (the FCA).
This new structure and these new approaches to regulation and consumer protection will come under scrutiny in the coming years to see whether they prove more effective than the FSA's regulatory regime that they superseded.
In the event that things still go wrong the regulatory environment has additional safety nets, including a complaints system (the Financial Ombudsman Service) and a compensation system (the Financial Services Compensation Scheme). We look at these nets too and at the support for consumers offered by the Money Advice Service and Citizens Advice.
We finish the week and the course with an extended test to assess your knowledge across each of the weeks of Managing my financial journey.
So do enjoy this last week of the course.
End transcript
 
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This course is presented with the kind support of True Potential LLP.

The True Potential Centre for the Public Understanding of Finance [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)]  (True Potential PUFin) is a pioneering Centre of Excellence for research in the development of personal financial capabilities. The establishment and activities of True Potential PUFin have been made possible thanks to the generous support of True Potential LLP, which has committed to a five-year programme of financial support for the Centre totalling £1.4 million.

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