Financial regulator fails consumer confidence test

Only 17% of financial services consumers are confident that the Financial Services Authority is reg- ulating the industry effectively, a new poll from YouGov reveals.

The figure stands in stark contrast to the FSA’s own research published in July 2008, which found that 67% of the population who were aware of the FSA were confident that it was regulating the industry effectively .

A cross section of 3,929 consumers of the leading financial services brands in the UK were interviewed by YouGov, and were also asked their thoughts on the takeover of HBOS by Lloyds TSB. The takeover has raised serious questions about UK competition policy and whether the creation of a superbank is in the best of interests of consumers.

Most people surveyed gave the thumbs down to the merger and thought it would negatively affect consumers in the long run.

Of those questioned, 45% felt the takeover would be a bad thing for consumers compared with 25% who rated it positively. A further 20% were indifferent and 9% were not sure. Just over half of Scottish financial services consumers thought it would be a bad thing.

When asked whether the take-over would improve confidence in the financial system, consumers were lukewarm. On a scale of one to 10 where 10 equals boosting confidence a great deal, 43% gave a score of less than six, with an average score of 5.6. About two-thirds said they were not confident the actions taken would resolve the current crisis.

Steve Nuttall, head of YouGov’s financial services consulting division, said: “Government, regulators and banks face an uphill struggle to restore consumer confidence. The takeover of HBOS is clearly not sufficient.”