The FSA's acting enforcement head, Tracey McDermott, has said the financial services industry is failing to heed the lessons of previous failures and "has no-one but itself to blame" for low consumer confidence in the sector.
Speaking at the City and Financial Conference, McDermott picked on a number of incidents of mis-selling by financial advisers.
She said: "How could any adviser ever have thought that selling a 94-year-old with a three-year life expectancy a five-year product was fair?
"How could any adviser have thought that investing large proportions - or even all - of a customer's retirement fund into high risk Unregulated Collective Investment Schemes was suitable advice?
"Why did advisers tell clients to invest in products they themselves did not understand?"
McDermott went on: "It really is no wonder that confidence is low and the industry, frankly, has no-one but itself to blame."
(read McDermott's full speech HERE)
She said the creation of the Financial Conduct Authority (FCA) presented an opportunity to restore lost confidence.
"[This will happen] in part through effective implementation of the RDR and increasing professionalism primarily," she said.
"And also by ensuring that the regulator is, and is seen to be, taking action to protect consumers or the markets - by doing whatever it takes to change behaviour in the industry - even where that means making unpopular and risky decisions."
McDermott added 2012/13 is likely to be the last year of the FSA, with 2013 seeing the finalisation of the new regulatory structure and the split of responsibilities between two new regulators - the Prudential Regulation Authority (PRA) and the FCA.
The latter will be responsible for enforcement and McDermott explained how intervention will play a key role for the new regulator.
"The government expects stronger intervention in financial services markets and better outcomes for retail consumers," she said. "There is considerable work to be done in this area, enforcement will have a key role to play in this.
She went on to explain how the FCA will be "pre-emptive, bold and tough" in its quest to achieve better outcomes for consumers and markets.
"The FCA will be clear on expectations: consumers can expect it to be more accessible and to communicate proactively, so they understand what they can expect from firms and the regulatory system," McDermott added.
"The FCA will seek to view issues through the eyes of consumers and understand the drivers of their behaviour as well as that of firms. Firms can expect more challenge from the FCA and more willingness to intervene."
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