Good morning! Lots of results announcements today - the Agenda is now complete.
1pm: that's all for today, thank you.
Motor Finance Review
Breaking news: the FCA have published a helpful RNS to clarify their progress when it comes to the motor finance review.
It was back in January 2024 when the FCA said they were going to undertake work in the motor finance market, to review discretionary commission arrangements. This has caused a great deal of uncertainty in the market as investors have no idea what sort of compensation scheme, if any, might be enacted.
This has been combined with activity in the courts which have found that car dealerships, acting as brokers, have a fiduciary duty to customers, which would imply the need to provide extra levels of disclosure around commissions, with the potential for yet another compensation scheme.
The result has been investor flight from the sector.
The FCA has now weighed in with an attempt to clarify its thinking:
We want to provide as much certainty as possible to firms, consumers and stakeholders. So, we are confirming that if, taking into account the Supreme Court's decision, we conclude motor finance customers have lost out from widespread failings by firms, then it's likely we will consult on an industry-wide redress scheme. We previously said it is more likely than when we started our review that we will introduce an alternative way of dealing with complaints...
A redress scheme would be simpler for consumers than bringing a complaint. We would expect fewer consumers to rely on a claims management company, meaning they would keep all of any compensation they receive. It would also be more orderly and efficient for firms than a complaint led approach, contributing to a well-functioning market in the future.
Next steps: the FCA will confirm within six weeks of the Supreme Court's decision if they are proposing a redress scheme.
They also note that Supreme Court case covers both discretionary and non-discretionary commissions, and "our next steps on non-DCA complaints will also be informed by the outcome of the Supreme Court case".
Graham's view
This announcement is better than nothing - it's always better to have some degree of certainty, rather than total uncertainty. However, I don't view it as good news for the sector. We still don't know how large the payments under a redress scheme might be, and a…
