‘The FCA is seen as incompetent at best, dishonest at worst. Its actions are slow and inadequate, its leaders opaque and unaccountable’
A group of MPs and peers have blasted the UK’s financial watchdog as “incompetent” and “dishonest”, with urgent calls for an overhaul.
The critique comes from a cross-party parliamentary group, including 30 MPs and 14 peers, after a three-year probe into the Financial Conduct Authority (FCA). Their report, set to hit Parliament on Tuesday, is based on accounts from 175 individuals, including ex-employees, scam victims, and whistleblowers.
According to their findings: “The FCA is seen as incompetent at best, dishonest at worst. Its actions are slow and inadequate, its leaders opaque and unaccountable.” The evidence suggests a watchdog “not fit for purpose”, plagued by leadership shortcomings, conflicts of interest, and a toxic culture.
The FCA, responsible for overseeing about 42,000 UK financial firms, is under fire from all sides. Victims of pension and investment scams lament the regulator’s failure to shield them or catch fraudsters’ “red flags”. Financial sector whistleblowers feel ignored, alleging that the FCA has not properly investigated claims or halted ongoing misconduct. Some of the FCA’s workforce describe a “defective” workplace environment riddled with mistakes and passive attitudes.
The report slammed the current state of affairs, stating: “Those who challenge a top-down ‘official line’ on any given issue are bullied and discriminated against, or even managed out.” It went on to propose several reforms, including setting up a supervisory council to evaluate the authority’s effectiveness, revising funding methods, enforcing a “no tolerance” stance on integrity breaches, and altering the process for appointing senior leaders.
The report warned that unless urgent action is taken to tackle these issues, there’s a real danger that “stakeholders’ patience is exhausted” and the conversation could move from reform to outright replacement of the organisation.
An FCA spokesperson responded by saying: “We sympathise with those who have lost out as a result of wrongdoing in financial services. However, we strongly reject the characterisation of the organisation.
“We have learned from historic issues and transformed as an organisation so we can deliver for consumers, the market and the wider economy.”
