Submission from Chartered Insurance Institute (S009)
Importance of professional standards
· Professional standards, comprising the three pillars of qualifications, continuing learning and ethical conduct are crucial ingredients of a properly functioning financial services market. Changes in culture and behaviour are as important as improving levels of technical knowledge. This is because information asymmetries between customers and intermediaries put the public at a disadvantage – they require appropriate products and competent advice in order to ensure that their needs are met and to ensure there is public trust and confidence.
Role of professional bodies
· Professional bodies have a crucial role to play in promoting higher professional standards and taking action when standards of practitioners fall short. Professional standards - particularly ethical conduct - can play an important role above and beyond adherence to regulatory rules.
· The CII has demonstrated that it is possible to raise standards of behaviour across the insurance and financial advice community through voluntary, industry-led initiatives. We believe this has many public interest benefits – not least improved levels of trust and confidence.
Move towards "banking profession" becalmed?
· The move towards a professionalism in banking similar to law, accountancy and increasingly insurance, appears to have declined over the past couple of decades. Membership of banking professional bodies remains low. There is one area where this is reversing - namely bancassurance - where introduction of the Retail Distribution Review to raise the standards of financial advisers is seeing a stronger focus on professional standards.
Using the regulatory review as a catalyst for changing behaviour
· Since regulatory review process began we have argued that whilst the structure of the new system will be important, it will be the judgements undertaken by supervisors and the conduct of firms, which will make the difference between regulatory success and failure. Delivering the right culture will be critical. There is a role to be played here by the new regulator, professional bodies as well as firms and individuals. We have argued that professional standards can act as a measurable proxy for culture, and it should be enshrined within the fabric of the new Financial Services Bill.
· The current reforms to the FSA and financial services regulation in the UK is a great opportunity to kick start professional standards in the banking industry and to consolidate improvements in behaviour made elsewhere within financial services to embed higher professional standards.
Amending the Financial Services Bill
· At a minimum, the Bill should ensure supervisors within the Financial Conduct Authority focus not only on whether individuals in "significant influence functions" are competent, but also the extent to which organisations as a whole, are making a credible effort to embed and grow professional standards as part of a wider effort to improve culture.
· It is worth pointing our regulatory system should help encourage and recognise initiatives beyond regulatory compliance that support voluntary efforts to embrace higher professional standard.
Delivering a cultural step-change
· But the Bill creating a new regulatory system must also be accompanied by a "real" change in regulatory culture and not just one on paper. We all know that regulation is going to be more intense – but it must be targeted on the right areas – and the level and commitment of professional standards exhibited across financial services must be one of them.
· Financial services firms must listen to the concerns of the public and embrace a cultural change in standards. Industry-led regulation is a powerful force in delivering this change rather than waiting for regulatory imposition.
Background and Introduction about the CII
1. The Chartered Insurance Institute (CII) is the world’s leading professional body for insurance and financial services with over 105,000 members in more than 150 countries. We are committed to protecting the public interest by maintaining the highest standards of professional and technical competence as well as ethical conduct. We are a not-for-profit organisation governed by a Royal Charter, which sets out our public interest remit "to secure and justify the confidence of the public and employers" in the profession. 
2. Our members are predominantly practitioners working in general insurance (such as underwriting, claims and broking) or life insurance, mortgages; or financial planning (such financial advisers) which has expanded particularly rapidly in recent years. As a result, the CII has a strong insight into how professional standards (by which we mean a proven commitment to ethical behaviour, qualifications and continuous learning) impacts upon these sectors - improving outcomes for consumers by driving and enhancing good behaviour.
3. This submission focuses on the role of the professional body in raising professional standards in financial services, before drawing some lesson for banking which can be applied from other parts of the financial services sector. We then discuss how the Financial Services Bill can be amended to cause a step-change towards higher standards in banking and to consolidate gains being made in other sectors.
Q1: To what extent are professional standards in UK banking absent or defective and what are its implications? How does this compare to (a) other leading markets and (b) other professions?
4. In answering Question 1, we start by discussing why professional standards are an important part of a healthy financial services market and then discuss examples of what can happen when standards slip or have atrophied over time.
5. Banking is a diverse sector and while there are clearly issues of professional standards across the different area of banking, these do not appear to be the same across the board, for example in retail banking (excluding financial advice) there seem to a deficit in basic qualifications and skills whereas in wholesale banking, including the sector covered by LIBOR issue, there seems to be problems in terms of behaviour and culture rather than technical standards or qualifications.
The importance of professional standards
6. A commitment to professional standards is an important cornerstone of a properly functioning financial services sector working in the public interest. This is primarily because the market suffers from significant information asymmetries. For example in general insurance, customers are unlikely to have the time or expertise to fully understand the risks they are exposed to, the benefits of insurance, or the price and value of insuring against those risks. Insurers and intermediaries are much better placed to understand these issues, but customers need to be able to trust that the products, services and advice provided to them will be appropriate.
7. Without trust, customers will be deterred from buying the financial products that they need or from seeking the appropriate advice, leading to a growth in the proportion of the population that is underinsured and a rise in the "savings and protection gap". Professional standards play a pivotal role in this mix by demonstrating to the customer that practitioners are sufficiently competent and honest to deliver products and services that are in the customer’s interest. Professional standards are therefore a necessary condition for a competitive market and help to underpin the integrity of the financial system.
8. This is not just the CII’s view. In a short article responding to the LIBOR scandal Adam Phillips, Chair of the Financial Services Consumer Panel, wrote:
9. "It has been a long time since "Big Bang" and cultural change is overdue in financial services. Change needs to be embraced at all levels in organisations. This is why the Consumer Panel is advocating imposing a duty "to act honestly, fairly and professionally in the interests of consumers" on the face of the Bill currently before the Lords". 
Why professional standards can help raise trust and confidence?
10. Professional standards are generally broken down into three constituent parts - the so-called three pillars of professional standards:
· Qualifications: Qualifications to provide practitioners with an appropriate level of knowledge and understanding. This acts as a signal of quality to consumers as well as ensuring expertise.
· Continuing professional development (CPD): Undertaking continuous learning helps practitioners keep their knowledge and understanding up to date which is essential in an industry that changes rapidly.
· Ethics and integrity A commitment to act in the interests of consumers is crucial to ensuring honest selling practices and good conduct.
11. Breakdowns in behaviour linked to poor standards of professionalism have been noted as key causes of consumer detriment. For example, on the retail investment side, the FSA’s Retail Distribution Review was initiated following a suspicion that low levels of competence and ethical conduct were in part responsible for the widespread mis-selling of financial products over the previous decade. In subsequent research by the regulator across a thematic review of platforms advice, the FSA found that practitioners exhibiting higher professional qualifications were far more likely to give customers appropriate advice than those who were not as well qualified  .
12. But for professional standards to be deemed effective in the public’s mind there need to be professional bodies with ethical codes and disciplinary procedures with teeth, able to police these standards and discipline practitioners when their standards fall short.
Q2: What caused the problems in banking standards?
13. In answering this question, we focus on the role of professional bodies in embedding and strengthening professional standards across financial services. We begin by setting out what good looks like for a professional body and describe efforts made by the CII to raise the bar in general insurance as an example of promoting higher professional standards.
The role of professional bodies in driving professional standards – what good looks like
14. At a minimum, strong professional bodies must focus on three areas to ensure that practitioners are sufficiently knowledgeable and behave appropriately. The three areas – or "pillars of professionalism" as they are sometimes include:
· Entry standards: At the very least, a professional body should provide a minimum level qualification necessary to work in the appropriate part of financial services and work with employers to embed this. Strong professional bodies will go further than this – seeking to drive up qualification standards by offering more advanced qualifications and demonstrating the benefit that this can have to consumers. This can be done through voluntary initiatives embraced by the industry to raise standards. For example, the CII has introduced Chartered status (degree level) for general insurance and financial advice practitioners who meet qualification standards (as well as other behavioural and learning requirements) equivalent to those in other professions such as accounting.
· Continuous learning: Continuing professional development is a vital component which goes to the heart of what a good professional body does - CPD is an important part of a doctor or lawyers’ professional duties. Just because practitioners have done an appropriate qualification at some point in their career does not necessarily mean that they are up to date with the latest developments and therefore continually able to provide the best quality services to customers. This is a standard view across all leading professions. Good professional bodies will ensure that their members do enough CPD and of sufficient quality to ensure that competency levels are maintained and keep improving over time. CPD must be rigorously checked and policed to ensure the profession as a whole is committed to this.
· Ethics: Professional bodies must uphold a stringent code of ethics which members must adhere to. Good professional bodies will go further and produce learning support to help provide practical support. Good professional bodies will also police the code – where there are complaints made about members, or where there are other forms of evidence of unethical conduct. Professions must have sufficient teeth to discipline members using independent disciplinary processes which are robust and will meet the test of public confidence.
15. In addition to these three strands, the governance of professional standards requires oversight by a an appropriate disciplinary process and a professional standards board to regularly review professional standards requirements imposed by the body on the industry, and thought leadership to develop and articulate the body’s vision of what the professional body should seek to be doing in the years ahead. We deal with each in turn below.
Professional Standards Board and independent disciplinary process
16. For many years the CII has had a Professional Standards Board with strong lay membership which oversees policy and standards for CII members including professional conduct issues. This Board is now independently chaired, (currently by a past president of the Law Society). This includes consumer and other representation chosen using Nolan principles.
17. The CII has a long established Code of Ethics supported by a disciplinary process (including both a Disciplinary and Appeal Committee, which are independently chaired). Our Professional Standards Board recently oversaw a revision to the CII Code of Ethics and a placed renewed emphasis on both the Code, and support and resources for members to understand ethical issues in a more practical way.
Higher professional standards Goes beyond regulatory compliance
18. When professional bodies get these elements right and when the industry is willing to embrace higher standards the market benefits. There is some FSA research which shows that practitioners with higher qualification levels are more likely to provide better quality of advice. A research paper prepared for the FSA by Jackie Wells and Mary Gostelow found:
19. "Professional bodies play an important role as a proxy that enables consumers to place their trust in a professional. Knowing that a professional is regulated, meet certain standards of knowledge and is subject to a code of ethics facilitates trust even when the individual professional is not known." 
20. Professional bodies can do more. Professionalism is more than the sum of its parts in terms of qualifications, CPD and ethics for individual practitioners, and the CII has sought to understand how firms can embed professional standards at an organisation-wide level.
Going beyond the minimum at a firm wide level
21. Professionalism in insurance and financial advice does not just refer to the characteristics of individual advisers, brokers or underwriters. Firms as a whole can also make a commitment to professionalism – and we think this applies equally to the banking sector. Key to this is for a firm to embed a culture which is aligned with the consumer interest – demonstrated by a measurable commitment to best practice running throughout the organisation.
22. While no-one in general insurance would proclaim everything is perfect, indeed far from it, in recent years there has been a growing commitment - shared by the leaders of the profession - that more was needed to raise professional standards. We are now embarking on this journey and below we provide two examples of how the sector is demonstrating such a commitment.
23. To become a CII Chartered firm, the business must ensure staff members acquire and retain the necessary knowledge and skills to deliver the highest quality services and advice. They must also work in an ethical manner that places clients’ interests at the heart of the services they provide. Chartered status, granted by the Privy Council, gives insurers and financial planners parity with other professional firms and distinguishes the Chartered title holders from competitors.
24. For example, Chartered broking firms must meet a number of key requirements including:
· A minimum of one of the board’s members must personally hold the CII Chartered Insurance Broker title.
· One of the firm’s board or highest management team (who, as an individual, holds the Chartered Insurance Broker title), must take on the role of Responsible Member.
· The entire board or highest management team together with a minimum of 90% of customer facing staff must be members of the CII.
· Access to a Chartered Insurance Broker must be available to customers.
· Firms must have a professional development programme in place.
· Firms must have core values that align with the CII’s Code of Ethics.
25. A corporate Chartered title is therefore a commitment to an overall standard of excellence and professionalism. A firm which holds each of these elements is one whose strategy is focused on delivering quality products and services to the consumer – epitomised through the achievement of rigorous learning and development for employees and a proven commitment to ethical practice.
26. A commitment to firm-wide professional standards is of course only one part of the mix of indicators that regulators will have to look at when assessing the level of risk posed by firms to consumers. But by failing to understand a firm’s commitment to best practice in this way, they will miss an important part of the picture. While the concept is still a relatively new one, it is increasingly de veloping support as it offers a powerful to reinforce profess ional standards at a firm level in addition to an individual level.
27. This initiative continues to show strong industry take up. By the end of 2008 there were around 200 chartered firms and this increased to 370 at the end of 2011. There are now over 500 chartered firms as of July 2012. We are currently reviewing the rules and standards which underpin these firms with a view to strengthening them to reinforce public confidence.
28. In co-operation with leading figures in the general insurance market, the CII formed a task force in 2009 to raise professional standards in general insurance. For this initiative to really make a difference, it was clear from the start that it would need buy-in from industry leaders across the sector. The result was the Aldermanbury Declaration published in March 2010 which called on the industry to commit to a common framework of professional standards for its practitioners. The Declaration seeks to deliver the following benefits:
· Better outcomes for customers.
· Improved standards of risk management.
· A more confident, trusted profession.
· More talented people attracted to a career in insurance.
· Increasingly rewarding careers for those within insurance.
· Reinforcing the reputation of the London wholesale insurance market.
29. By the first anniversary of the Declaration, 200 firms including all major insurers had signed up to this commitment. We believe these proposals are ambitious but realistic and have called on all firms signing up to implement the changes by December 2013.
30. Firms that have signed up to the Aldermanbury Declaration have made a long-term commitment to professionalism suggesting that their management are determined to improve outcomes for consumers.
31. Both the Chartered firms and Aldermanbury Declaration initiatives, reflect a growing movement towards higher professional standards across general insurance and financial planning. This movement is not the result of regulatory enforcement but a voluntary drive to improve across the sector. The insurance industry is by no means perfect, but we believe that many firms are on the right path and by signing up to the Declaration have made a demonstrable commitment to commit to higher professional standards.
32. We believe it is important that voluntary initiatives like these to improve the professional standards of both individuals and firms should receive greater recognition and support form regulatory and other bodies to help encourage others to do likewise.
Measuring the impact of our initiatives
33. We believe it is very important to improve our understanding of how our firm-wide initiatives, and professional standards in general, affect outcomes for consumers. To meet this aim, we are currently developing a series of indices which will attempt to measure over time these impacts.
34. For an in depth discussion paper on the approach we are taking please see our paper ‘Measuring Professional Standards -Demonstrating positive outcomes from doing the right thing’: a discussion paper - February 2012).
Banking professional membership becalmed
35. Whilst general insurance is by no means perfect, it is making progress towards a building the appropriate pillars for a proper profession. Banking - whether it is wholesale or retail- with the exception of the financial planning area - appears to made little progress towards higher professional standards and numbers of members of professional bodies - a good proxy for this -remain low in proportion to the total banking workforce.
36. The chart below (Figure 1) shows the number of members of all major professional bodies headquartered in the UK. The CII holds by far the largest number of insurance and financial services members with currently 105,000 (the vast majority in the UK), but with a small but increasing number of members in banking. Accountancy, law and surveyors are also well represented. What is noticeable, in the context of this parliamentary inquiry, is the small proportion of members of specific banking bodies.
Figure 1. Professional body membership
37. It is interesting to note that the CII - which traditionally had little or no membership in banking institutions - has seem rapidly grown in what might be termed bancassurance over the past few years.
Impact of the Retail Distribution Review
38. The FSA’s Retail Distribution Review (RDR) began in response to a widespread perception of public detriment in retail investment and financial advice.
39. The RDR will introduce a number of changes to financial advice, including (amongst others) raising the mandatory qualification level for providing financial advice from Level 3 (equivalent to A Level) to Level 4 (equivalent to first year degree level) as well as other professional standards requirements like mandatory CPD. The RDR therefore provides an opportunity for all professional bodies in the financial advice space to show how they could support increased professional standards in the distribution of retail investment products.
40. Throughout the RDR process, the CII has argued for a "step change" in professionalism for the benefit of consumers. As well as publicly supporting the regulatory changes through consultation responses to government and submissions of written evidence to various parliamentary inquiries, we have continued to support our members in making this change by providing a range of activities including free regional conferences, specialist podcasts to help with CPD, business transition workshops, gap fill sessions and more.
41. Our efforts have not gone unnoticed. There appears to have been a flight to quality to robust professional bodies like ourselves. We are increasingly been seen by the industry – including by banks that employ financial advisers – as the professional body of choice. According to FSA statistics last year the CII has 74% of the total regulated adviser population who are members of a professional body (and 54% of all advisers in the market). There is evidence that penetration of this segment has continued to increase apace since this FSA research was produced. As a consequence of the CII’s ability to prepare the industry for the RDR, we were amongst the first tranche of professional bodies to become an FSA Accredited Body in September 2011 allowing us to issue Statements of Professional Standing to financial advisers. There is no doubt that the RDR represented a challenge for the advisory community, but it is a challenge that good professional bodies must help ensure delivers the best possible outcomes for consumers.
Figure 2 sets out in more detail where membership of regulated financial advisers now sits.
Figure 2. All Retail Investment Advisers, by professional body membership (N Bank and building society membership is B\BS) Source: Atkin et al (Dec 2011), Research: Progress towards the professionalism requirements of the Retail Distribution Review, A research study for the FSA.
Q3: Are the changes already proposed by (a) the Government, (b) regulators and (c) the industry sufficient?
42. In responding to this question, we focus on the changes to financial services regulation currently underway which will see the creation of a new regulator called the Financial Conduct Authority. We believe that this regulatory review provides an opportunity to kick-start the road to increased professional standards within the banking sector and help consolidate improvements made elsewhere. But for this to occur, the Financial Services Bill should make greater provision for professional standards in its ‘have regards’ and the new regulators must embrace a cultural change and actively promote cultural change within firms.
43. We believe that professional bodies with the resources, disciplinary teeth and a vision that goes beyond the Victorian conceptualisation of what such a body should be for are vital to delivering financial services in the public interest. There is a role for professional bodies above and beyond "regulation" – especially in the promotion of better conduct as opposed to simply providing firms with the means to fulfil their minimum regulatory requirements under "Training and Competence". Until recently it is clear that large parts of the banking industry have not been proactive in engaging in this agenda.
What needs to happen?
44. So how can this situation be improved? One thing is desperately needed: Government should provide a strong indication that minimum standards will no longer be sufficient – firms must seek to build and grow professionalism beyond compliance.
45. The current review of financial services regulation in the UK provides an opportunity to drive up professional standards right across financial services (and not just in the banking sector). Since HM Treasury’s very first consultation paper on reforming financial services regulation in 2010, the CII has argued that, whilst the structure of the new system will be important, it will be the judgements undertaken by supervisors and the conduct of firms, which will make the difference. Our argument has been echoed across the policymaking community. Most notably, former FSA Chief Executive Hector Sants said that regulators should "ensure firms have the right culture for their business model – the right ethical framework – to facilitate the right decisions and judgements and we should intervene when we find those frameworks are lacking".  And our arguments around culture and regulation were also referred to during the Financial Services Bill Second Reading and committee stage debates in the House of Lords  .
Improving culture through professional standards
46. Since news of the recent LIBOR scandal first broke, the debate is no longer about whether or not culture within the banking sector needs to improve, but how to do it and how to use legislation for this purpose. The CII has, over the last two years, consistently argued that a commitment to professional standards can act as a proxy for good culture and behaviour. We believe that the Financial Services Bill could be drafted in such a way as to stimulate an increase in professional standards across the financial services sector. At a minimum, it must allow supervisors within the new regulatory bodies to focus, not only on whether those individuals in "significant influence functions" are competent, but also the extent to which organisations as a whole, are making a credible effort to embed and grow professional standards. Where it is found that firms lack such a commitment to improve behaviour, supervisors should act. Currently, there are no such provisions within the draft legislation and this oversight should be urgently addressed.
Amending Clause 5 to direct the Financial Conduct Authority
47. In the recent House of Lords debate on clause 5 of the Financial Services Bill which pertains to the objectives of the Financial Conduct Authority, a number of amendments were suggested that would help to ensure that supervisors properly consider professional standards. One was related to the Integrity objective – to broaden the definition of integrity within the financial system to include the "level of professional standards exhibited by those working in financial services". The other was to reinstate the Joint Committee’s probing amendment from December 2011 - a duty on firms to behave with "honesty fairness and professionalism" which has support from both the Financial Services Consumer Panel and the FSA. In responding to these amendments, Lord Sassoon intimated that this Banking Standards Committee would be responsible for issues associated with raising professional standards across financial services. We would therefore recommend that this Committee takes on board both amendments to the Bill noted above and ensure that the FCA (and PRA) are given a clear signal to focus on this as part of their new focus. We believe they would send a clear signal to firms that the new regulators will take professional standards seriously and this will act as a catalyst for firms to put organisation-wide programmes in place to raise standards of competence, ethics and conduct. It will be the kick start that the banking sector needs to develop a much more professional culture – a transition that appears to have seriously stagnated in recent times.
48. This is of course, just a start. Ultimately, in order to meet the public interest test, financial services in general (not just banking) must ensure its own house is in order where there is risk of public detriment rather than relying on regulatory imposition. The recent Aldermanbury Declaration supported by general insurance leaders is a case in point. If the latter continues to be the case, then the public’s trust in the industry could be irreparably damaged. Proactive Professional bodies which actively promote higher standards, including public reprimand and disciplinary action where required, can play their part. The challenge for financial services, and banking in particular, may be considerable following the recent scandals, but, buttressed by a complementary regulatory framework, we can drive forward higher standards and help the industry regain the public’s trust.
Q4 Remuneration and Compensation
49. There is no doubt that remuneration has a strong impact on how firms behave. This is an area where both regulators and firms can do more through increased transparency as well as by aligning incentives more closely to the longer term interest of stakeholders including the public interest. The financial sector has a chequered history in developing innovative products and services some of which have been mis-sold in part because of the incentives which were offered.
50. It is worth pointing out that this has been traditionally less of an issue for the insurance sector which has traditionally been more focused on long terms returns. As a 2011 Mercer survey of remuneration noted:
51. "Despite recent moves by the industry to increase base pay, the report highlights that the banking industry differs significantly from the insurance industry in the structure of its pay packages. A comparison of data between the banking and insurance industries shows that while the industry as a whole is shifting pay mix in favour of increased base pay and longer-term incentive payouts, the insurance industry already has much less emphasis on short-term incentives as a proportion of total compensation " . (source: Mercer’s 2011 .)
52. Whilst there are various corporate governance changes and proposals for encouraging greater long-termism currently being proposed by BIS and others, one area which might be looked at is in more detail is encouraging a rebalancing of both corporate and individual remuneration schemes not only to be more longer term in nature but also to have a greater bias (and transparency of this) to elements which impact the consumer or the public in general.
Conclusions and recommendations
Importance of professional standards
53. There needs to be greater recognition of the importance of professional standards within and beyond the new regulatory regime. Professional standards in terms of qualifications, continuing learning and ethical conduct are crucial ingredients of a properly functioning financial services market. This is because information asymmetries between customers and intermediaries can put the public at a disadvantage – they need appropriate products and competent advice in order to ensure that their needs are met.
Role of professional bodies
54. Professional bodies have a crucial role to play in promoting higher professional standards and taking action when standards of practitioners fall short.
55. Chartered Insurance Institute has demonstrated that it is possible to raise standards of behaviour across the insurance and financial advice community through voluntary, industry-led initiatives (like the Aldermanbury Declaration) . We have also supported more regulatory focused efforts like the professionalism strand of the FSA’s Retail Distribution Review for financial advice. We believe this has many public interest benefits – not least improved levels of trust and confidence .
Move towards "banking profession" stuttering
56. The move towards a " professionalism in banking " similar to law, accountancy and increasingly insurance, seems to be stuttering over the past few years . Membership of banking professional bodies remains low , other than in areas covered by financial advice requirements .
57. We think the current reforms to financial services regulation in the UK is a great opportunity to kick start professional standards in the banking industry and to consolidate improvements in behaviour and culture made elsewhere within financial services.
Using the regulatory review as a catalyst for changing behaviour
58. Since the beginning of the regulatory review process, the CII has argued that whilst the structure of the new system will be important, it will be the judgements undertaken by supervisors and the conduct of firms, which will make the differ ence between regulatory success or failure. Promoting and encouraging the right culture will be critical.
59. We have argued that professional standards can act as a measurable proxy for culture, and it must be enshrined within the fabric of the Financial Services Bill.
Amending the Financial Services Bill
60. At a minimum, the Bill should encourage supervisors within the Financial Conduct Authority to focus, not only on whether those individuals in "significant influence functions" are competent, but also the extent to which organisations as a whole, are making a credible effort to embed and grow professional standards.
61. Where it is found that firms lack such a commitment to improve behaviour, supervisors should act. Currently, there are no such provisions within the draft leg islation and this oversight should be urgently addressed.
Delivering a cultural change
62. But the Bill must also be accompanied by a "real" change in regulatory culture and not just one on paper. We all know that regulation is going to be more intense – but it must be targeted on the right areas – and the level of professional standards exhibited across financial services must be one of them.
63. And, crucially, financial services firms must listen to the concerns of the public and embrace a cultura l change in standards. Industry- led regulation can and must lead the way in this regard, rather than waiting for external regulatory im position .
24 August 2012
 Chartered Insurance Institute, Charter and Bye-Laws, Art 3(a).
 Phillips (July 2012) Why honesty, fairness and professionalism could become a byword for providers, article for Macro
 FSA (June 2010) Consultation Paper 10/14: Delivering the RDR http://www.fsa.gov.uk/pages/Library/Policy/CP/2010/10_14.shtml
 Wells and Gostelow (Nov 2009, updated March 2011) Professional standards and consumer trust , prepared for the FSA
 Hector Sants (Oct 2010) “Can culture be regulated? Speech to Mansion House Conference on Values and Trust”
 Baroness Hayter (2012) Financial Services Bill, Second Reading