FCA has written a portfolio supervision letter to CEOs of price comparison websites. The letter notes the key priority that customers buying products through PCWs should buy products consistent with their demands and needs on the basis of appropriate and clear information that enables them to make an informed choice. But FCA has noted some firms within the sector have a poor understanding of their obligations and calls on firms to be more proactive in responding to regulatory change. It does, however, note that overall, they have responded well to the challenges of the pandemic.
FCA highlights as the key drivers of harm:
- consumers being sold products that do not suit their demands and needs – which goes to understanding of the products firms sell
- consumers being unable to access financial services – in particular, FCA encourages PCWs to embrace rule changes for PEMCs
- ineffective governance arrangements and poor culture – stressing the need for clear accountabilities, a robust risk framework and strong Board oversight. The letter also stresses the need to ensure all Certification staff have been fully assessed and that they and all Conduct Rule staff fully trained by 31 March 2021
- poor operational controls – FCA focuses particularly on the risks of cyber attacks and refers firms to its consultation on operational resilience and
- poorly managed innovation – in particular considering consumer outcomes and potential harm.
The letter also notes FCA’s recent thematic report on household insurance pricing practices and comments that, while PCWs do not set the price of products, they do influence the dynamics of competition and pricing outcomes for consumers. It plans to engage with PCWs on its proposed remedies.