This month we bring you the best bits from various regulators' speeches about the future regulatory model, improvements for standards in financial advice and what’s next for the FCA-Pensions Regulator joint strategy. Read on also for rumours of changes to the rules for unit-linked funds and new rules for non-UCITS retail schemes.

A regulatory model for a changing world

Christopher Woolard, the executive director of strategy and competition at the Financial Conduct Authority, recently delivered a speech on the future of regulation in our changing world. This contained some useful stuff about the aspects of regulation that are likely to change in the near future and here are some of the highlights.

What does the future of the market look like?

• Consumers' needs and attitudes continue to change in response to social changes and new IT. Consumers are faced with more choice than ever before and have fewer options for advice and guidance that might lead them to make the right choices. This is unlikely to change in the future and, as a result, there is greater potential for poor results and losses for consumers. Regulation should therefore focus on simplifying things for consumers, not adding more complex rules.
• Innovation is gathering pace. The UK is changing from services being delivered digitally to truly digitised products using artificial intelligence and machine learning. Regulation must keep up.

What is the future of regulation?

Woolard accepts that the current regulatory model comes from a world quite different to the one we live in today. It is quite right for people to suspect that we do not have the right regulatory model for the future. Over the next few months, the FCA will be asking questions of the industry and the public and setting down its thoughts about a regulatory model fit for the future in some discussion papers.

What might this future regulatory model look like? This remains to be seen, although the speech gives us a few clues.

• More interested in results. We can expect the regulator to define and state the key results that it wants to see in sharper detail. Woolard is explicit that these outcomes should offer consumers the right amount of protection but should not overly pander to them. Pursuit of profit is essential for healthy competition and functioning markets and consumers ought to understand the interplay between risk and reward. Subsequently, next year’s Sector Views and Business Plan will be much more results-focused.
• More interventionist. Despite the best efforts of regulators, the disclosure of various things to customers is not always enough to keep them safe and lead them to make the right choices. For more persistent problems, the regulator will centre its interventionist tactics on the behaviour of real consumers in an effort to prevent further harm from occurring.
• Simpler and clearer. The rulebook, which contains the FCA's principles, is often overly complex. The FCA will try to simplify the rulebook and the principles within it and align them to results. This ought to help all firms (especially the small ones) understand what they need to do.
• More technocratic. The regulator believes that practitioners can use IT technology to gauge the understanding that consumers have of various things and to help them perform services.
• More joined up. The regulator will be working in a more joined up way with other agencies to deliver rounder protection for consumers.