A worrying picture is emerging of a nanny state approach to investment regulation that will curtail the freedoms of many self-directed investors.
Next year the regulation of financial services will change, with the new Financial Conduct Authority (FCA) replacing the Financial Services Authority's (FSA) consumer protection beat. Rejecting the UK regulator's prior approach, which emphasised disclosure and buyer responsibility, the new FCA chief, Martin Wheatley, has announced the FCA will seek to protect "irrational investors" from their own worst impulses by keeping potentially problematic products out of their hands. The new FCA will have new powers to restrict the marketing of products at risk from misselling to certain groups of customers, or remove or change unsuitable product features. It will even be able to put in place instant product bans, without consultation, for up to a year.
Critics have said this regulation strategy looks more like product approval by another name, while many in the industry are worried about the introduction of what they term 'nanny state' financial services regulation.