Your guide on the Financial Conduct Authority
What is the FCA?
Have you ever applied for a mortgage, a secured or personal loan, a credit card or even a new current account? If so, you’ve probably seen the FCA mentioned without perhaps understanding its purpose. However, having a basic level of awareness and understanding about the FCA only helps you as a consumer.
Our in-depth guide below answers key questions like, ‘What does FCA stand for?’, ‘Who are the FCA?’, ‘What does the FCA do?’ and more.
What does the FCA stand for?
FCA is an acronym for the Financial Conduct Authority. We’ll mostly refer to it as the FCA to keep things simple throughout this guide.
What is the FCA?
The FCA is an independent public body responsible for regulating financial services firms and the wider financial markets in the UK. Although the organisation reports to the Treasury, and therefore Parliament, it’s an independent regulator. Its funding doesn’t come from public money, but instead from fees paid by companies and organisations being regulated.
The FCA was established in 2013 as a replacement for the Financial Services Authority (FSA). Headquarters in London, along with offices and staff in Leeds, Edinburgh, Belfast and Cardiff, show its authority and reach across the UK.
What does the FCA do in the UK?
The headline is that the FCA regulates the conduct of roughly 42,000 UK businesses. But its purpose is much broader than this. The organisation aims to ensure the financial markets are honest, competitive and fair for consumers and businesses alike. It also keeps an eye on the wider UK economy and financial system to ensure it’s functioning as effectively as possible.
The FCA states that its three main objectives are to:
- Protect consumers from the bad conduct of financial service providers
- Protect the integrity of the UK financial system
- Promote effective competition in the interests of consumers
How does the FCA protect consumers?
Practically every adult in the UK is a consumer of financial services in some way. Your bank accounts, loans, pensions, savings and investments are all held or issued by companies and institutions in the industry.
Almost all providers offering regulated financial services – including banks, lenders and financial advisers – have to be authorised by or registered with the FCA. Achieving authorisation means meeting strict standards and following set rules when trading. If authorised providers fall below the expected standards, the FCA can step in to impose fines, stop providers trading and recover compensation for consumers if necessary.
An integral part of the FCA’s protection principles is ‘Consumer Duty‘. This requires financial services firms to put their customers’ needs ahead of their own. According to Consumer Duty guidelines, regulated companies must:
- Provide support to customers and clients when they need it (particularly if they’re vulnerable)
- Provide products and services that offer fair value and meet the needs of the consumer
- Communicate in a way that consumers understand and give them all the information needed to make informed decisions
Where can I find the lender fee amount?
It’s not always obvious where to find the lending fees added for secured loans such as mortgages. This is because they’re usually tied into the total cost of a loan.
The Annual Percentage Rate of Charge (APRC) figure given to you by lenders takes into account the annual cost of a mortgage over its lifetime, including the interest rate and any additional charges.
To find specific information about lender fees, it’s always worth checking your mortgage illustration or binding mortgage offer and the terms and conditions of the company you’re looking to borrow from.
What financial products and services are regulated by the FCA?
The FCA authorises firms to offer regulated financial services and products. A company or individual must be authorised to provide:
- Current and savings accounts
- Credit cards, personal loans, secured loans, credit broking and other consumer credit services
- Debt advice and debt collection services
- Insurance
- Investments such as shares, funds and pensions
- Mortgages
- Payment and money transfer services
There are also certain products and services that the FCA doesn’t regulate or supervise. Companies and individuals don’t need to be authorised or registered to offer:
- Estate planning, wills and probate advice
- Debt collection for unpaid council and utility bills
- Buy-to-let mortgages
- Commercial mortgages
- Business loans
What's the difference between approved and registered providers?
The key difference is permission. Being authorised by the FCA means meeting the required standards and having the organisation’s permission to provide certain regulated products and services. Registered companies and individuals still have to meet the requirements set by the FCA, but they don’t need permission to offer their services.
Why is it important to choose FCA-regulated providers?
Banks, lenders and other providers regulated by the FCA are bound to strict standards. This should give you confidence that you’re in reputable hands with whoever you’re dealing with. Consumer Duty principles ensure that they do things in your best interests first.
If things take a turn for the worse, using authorised or registered financial service providers also gives you more protection. If you deal with a company or individual that isn’t authorised or registered, you won’t be able to make a complaint to the Financial Ombudsman. You also won’t be protected by the Financial Services Compensation Scheme (FSCS) if the company you dealt with goes out of business.
How do I check if a company is authorised by the FCA?
Most financial services providers that are approved by or registered with the FCA will make this clear on their website or in any official documentation. But to check officially, you can use the Financial Service Register. Search for the company or individual by name or by using its unique firm reference number (FRN).
Are Evolution Money loans regulated by the FCA?
Yes! We’re authorised and regulated by the FCA at Evolution Money. We take Consumer Duty seriously – making sure information is easy to read and understand while being transparent with our fees and contracts.
Our secured homeowner loans from £5,000 to £100,000 could help if you’re making home improvements, buying a new car or consolidating your debts. Check your eligibility for a secured loan today to get started.
While you’re here, feel free to check our help and advice hub for more guides on a range of loan and personal finance topics.
Representative 22.93% APRC variable.
For a typical loan of £26,600 over 180 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £484.00. This includes a Product Fee of £2,660.00 (10% of the loan amount) and a Lending Fee* of £763.00, bringing the total repayable amount to £87,030.00. Annual Interest Rates range between 11.7% to 46.5% (variable). Maximum 50.00% APRC. *Lending Fee varies by country: England & Wales £763, Scotland £1,051, Northern Ireland: £1,736.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
