The Financial Conduct Authority (FCA) has determined that the most effective way to manage its legal and reputational risks is to obliterate the very records that might, in time, hold it to account. From April, emails lingering in inboxes for over a year will be summarily erased—unless, of course, they meet the elusive threshold of being 'important enough' to be retained.
One can only wonder what the FCA’s reaction might be were a regulated firm to adopt an identical approach, diligently purging evidence of client conversations stretching back decades—records ostensibly maintained to support ongoing advice reviews and ensure the integrity of financial planning. Would such a firm be lauded for its commitment to operational efficiency, or would it find itself in the unenviable position of a defendant in a regulatory enforcement action?
Might this, perchance, be a tacit encouragement for firms to engage in a mass shredding exercise, ensuring that all those pesky records detailing years of absent advice (and, potentially, misadvice) simply vanish? With the Chancellor, Rachel Reeves, pushing the City to prioritise growth at all costs, one might be forgiven for suspecting that a well-timed memory hole would be most convenient. After all, if no documentary evidence of malfeasance exists, compensation obligations dwindle accordingly.
The FCA’s assurance that only 'unnecessary' emails will be deleted is, at best, a marvel of bureaucratic ambiguity. What, precisely, constitutes necessity? And who, exactly, will assume the Herculean task of reviewing every communication to determine its fate? If, as one might expect, the answer is 'no one,' then the natural consequence will be a systematic cleansing of any correspondence that might later prove inconvenient.
The irony is inescapable: this is the very body tasked with ensuring that financial institutions maintain adequate records to protect consumers. If a pension provider or advisory firm were to announce a similar policy—purging evidence that might one day be required for redress calculations—it would no doubt find itself subject to the full force of regulatory censure. And yet, when the regulator itself engages in such an exercise, it is dressed up as an exercise in efficiency.
One might be inclined to call this hypocrisy, but that would suggest a degree of self-awareness that seems entirely absent. The FCA, it appears, is less a watchdog and more a magician—capable of making things disappear with a flourish, while maintaining an expression of grave concern for consumer protection.
If nothing else, this move should serve as a stark reminder to the public: regulatory oversight in financial services is often little more than theatre, a performance designed to placate while ensuring that the powerful remain untroubled by the consequences of their actions. The FCA’s latest trick? Making accountability vanish into thin air.
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