§ Lord Taylor of Warwickasked Her Majesty's Government:
How they intend to respond to the Financial Services Authority's expressed concern that too many consumers lack an adequate understanding of finance to make sensible investment decisions. [HL947]
§ Lord McIntosh of HaringeyWe welcome the publication by the Financial Services Authority (FSA) of itsFinancial Risk Outlook for 2004. As the outlook explains, it highlights economic, financial, political and social developments that affect its ability to meet their statutory objectives. It puts its regulatory work in context by explaining the risks it is responding to. The FSA publishes the document to increase awareness of these risks and understanding of its actions.
The outlook refers to seven separate priorities, including challenges to the life insurance industry, reform of retail regulation, other reforms, the threat from terrorism, financial crime, and consumers' inadequate understanding of financial concepts and issues.
The Government have long recognised the challenges consumers face. That it is why the Financial Services and Markets Act 2000 gave the FSA statutory objectives to promote public understanding of the financial system and secure the appropriate degree of protection for consumers.
50WAThe Government are responding to those challenges through a comprehensive strategy that embraces the establishment of a suite of simplified products, by work across government to improve access and understanding, through supporting the regulatory work of the FSA, and by taking part in the work of the Financial Capability Steering Group.