In a speech to the City of London at Mansion House on Thursday, Bailey said the advice market had been the focus of a significant amount of attention from the FCA, noting the retail distribution review.
He said the regulator was working to fix an apparent gap in the advice market, a gap exacerbated by low interest rates making the cost of advice look expensive against low returns.
Project Innovate and the review of financial advice, FAMR, are among the initiatives underway to develop the market, he said, and were important for solving the uncertainty between what constituted advice and guidance.
“I strongly agree the more uncertain the boundary, the more advisers will rationally aim to keep away from going nearer to it, something that is not helpful,” he said.
A consultation on proposed changes to the FCA guidance on the boundary is ongoing and aims to offer firms more clarity.
Bailey added: “My commitment is that the work on this important issue will go on until firms can operate successfully to the benefit of consumers using common sense and good rules of thumb.”
He went on to press the importance of the public interest as a strong feature of financial services, but said it was something that had been overlooked in the run up to the financial crisis of 2008.
“I don’t think public interest had the same profile in the years before the financial crisis. Social norms change, as do attitudes to regulation.”
Working to solve the “big issues” in finance, including the advice market, was key to better serving in the public interest, Bailey said.
