Conflict of interest concerns raised over new financial regulation watchdog

The government’s pick to oversee financial regulators is also being paid by those with an interest in promoting deregulation, campaigners warn 

London, 5 February 2024 – Concerns have been raised over the Treasury’s appointment of Rachel Kent as the new Financial Services Complaint Commissioner by research and campaign group Positive Money, as it is revealed she is also being paid to advise the government and a law firm serving the financial services sector.  

The Financial Services Complaint Commissioner oversees complaints made by private financial firms against the UK’s current financial services regulators: the Financial Conduct Authority (FCA), the Payment Systems Regulator (PSR) and the Prudential Regulation Authority (PRA).

Despite taking-up the new commissioner role, Kent will remain on the payroll of law firm Hogan Lovells, where she was “a senior partner in the financial services regulatory team advising banks, insurers, investment and wealth managers and financial market infrastructures”. 

Kent is described by her employer as “tenacious in defending her clients’ interests,” and by a client as “the best all-round financial services partner in the City.” 

Kent responded to Positive Money’s concerns by saying that she will no longer be a senior partner at Hogan Lovells, though she confirmed that she will remain on its payroll as “a part time consultant”. Her response further revealed that she is also being paid to advise the government, which raises further concerns given the government’s focus on promoting the interests of the sector through a ‘competitiveness and growth’ objective for regulators, which has fuelled fears of a return to light touch regulation. 

Though Kent claims that she “will not take any part in work for regulated firms”, Positive Money point out the money she receives from Hogan Lovells will ultimately come from its clients, which include regulated firms, and question whether this will affect the Commissioner’s ability to objectively reach decisions on whether complaints are justified or not.

Fran Boait, co-executive director at Positive Money, said: 

“Tasking a lawyer who remains in the employment of a business serving financial firms with judging those same firms’ complaints against regulators creates a clear conflict of interest. 

“It would pile on more pressure for lax regulation and watered-down standards in order for regulators to meet new objectives to increase the ‘competitiveness and growth’ of the financial sector, with the public paying the price.

“Either Kent must drop these conflicts of interest, or the government must find someone else for the job if she is unwilling to do so.” 

Notes:

• Positive Money’s initial letter to Rachel Kent can be found here: FRCC (1).docx

• Rachel Kent’s response to Positive Money can be found here: Letter from Rachel Kent 25 January 2024

• Positive Money’s follow-up letter to Rachel Kent can be found here: FAO Rachel Kent_ Conflicts of Interest 26 January 2024

• Rachel Kent’s Hogan Lovells profile can be found here: https://www.hoganlovells.com/en/rachel-kent and further details can be found here: https://pdf.hoganlovells.com/en/rachel-kent