"So the Financial Conduct Authority, like other public authorities, must try to be ready for a downturn when it comes."
In his speech, which covered 'stress testing for human beings', Mr Randell reinforced the FCA’s expectations about what financial firms should be doing, right now, regardless of when the next downturn comes.
It was also suggested that in a recession some final salary pension scheme members, who are battling with short term financial pressures, may be tempted by “unscrupulous advisers” to transfer out of their defined benefit scheme.
There is also the risk that people’s confidence in further pension saving may be shaken so that they reduce their saving or stop it altogether, he said.
Mr Randell said: “We already see too many people who are not saving enough. All policymakers will need to consider how to support further retirement saving and guide savers to the best long-term investment choices."
He added: “It’s important that we use our ongoing evaluation of the Retail Distribution Review and Financial Advice Market Review to assess whether the advice market will deliver what consumers need, including in a downturn.”
amy.austin@ft.com
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