FCA accused of ‘peddling false narrative’ at online annual meeting

A pressure group pushing for higher standards in finance has accused the Financial Conduct Authority of “peddling a false narrative” at its online annual meeting last week and called for a return to face-to-face meetings.
The Transparency Task Force (TTF) has written to Ashley Alder, the FCA chairman, and Nikhil Rathi, the regulator’s chief executive, accusing FCA officials of misleading the audience over the investor protection regime. Remarks made at the meeting were “factually inaccurate”, it said.
It has also criticised the regulator for the structure of its public meeting, which made it impossible at the time to challenge or contradict officials. The meeting was “digital only” with all outside questions chosen and then voiced by Alder.
The hard-hitting letter has been copied to Tulip Siddiq, the Treasury minister responsible for the City, and to Dame Meg Hillier, the newly elected chairwoman of the Commons Treasury select committee.
At the meeting, FCA officials including Rathi and the deputy chairman, Richard Lloyd, said that parliament had required it to bring in its “consumer duty” when in fact legislators had recommended a much tougher “duty of care” on the industry, the task force said.
This was “misleading”, the task force said, and called on the FCA to issue a statement “setting the record straight”.
Andy Agathangelou, founder of the TTF, said it was not acceptable that nobody got to challenge statements made at the meeting.
“The prime example must be what they have said about the consumer duty, where they peddled a false narrative about the consumer duty being instigated by parliament when in fact politicians instructed the FCA to consult on, and bring forth rules, on a duty of care — something that has a very specific meaning in law and is not at all the same thing as the FCA’s concoction.”
The criticism comes at a difficult time for Alder, who two weeks ago was found to have breached his organisation’s own rules on the treatment of two whistleblowers, revealing their identities to FCA officials without their consent.
An investigation by Lloyd, the senior independent director on the FCA board, found that Alder, who faced calls to resign, had not followed “the letter” of the rules but that his actions had been “reasonable” and made in the firm belief that there was no realistic risk of harm to the whistleblowers.
Agathangelou is also chairman of the secretariat of the All Party Parliamentary Group on Investment Fraud and Fairer Financial Services and the co-founder of a group representing investors who suffered in the Woodford scandal.
Agathangelou said that online meetings — introduced in 2020 — had been a reasonable response to the Covid crisis. “But with life back to normal, we believe it is time to return to in-person or hybrid events,” he added.
“The great benefit of having an engaged audience physically present is that contentious statements can be subject to questioning and constructive challenge. Had last week’s event taken place on such a basis, I and others would immediately have taken issue with the misleading statements about the consumer duty and the correct position would immediately have been placed on record.”
In his letter, he quoted commentary last week in The Times, which said the meeting was a stage-managed sham.
The FCA was approached for comment. Sources said that provisions in the legislation allowed them to consult on other options instead of a duty of care, a fact omitted from the TTF letter.