Professor Ray Barrell commissioned to scrutinise FSA report
Brunel University’s Professor Ray Barrell was commissioned by the Financial Services Authority (FSA) last month to produce an independent review of a report for their latest publication.
The report by PricewaterhouseCoopers provides detailed medium-term projections for the macro economy and analyses the implications of this economic outlook for likely future financial returns.
It underpins the prescribed rates of return that financial services companies must use in calculations when providing customers with projections of future benefits from retail investment products.
Professor Barrell’s report, Comments on the PWC Report to the FSA on rates of return, provides his professional judgement on whether the methodology underlying the report is suitable.
He also explored whether the data and research accessed was appropriate, the analysis of the data was relevant and the conclusions reached were fair and reasonable.
Professor Barrell said: “'The UK is well served by advice from the FSA on rates of return on saving, and scams like the Madoff Investment scheme are not common here.
“I was pleased to be an external academic referee on this report. Brunel's involvement in such activities ensures that the consumer is protected.”
The FSA, which is based in London’s Canary Wharf, is funded by fees charged to the industry and is responsible for the regulation of financial services in the United Kingdom.
It aims to reduce financial crime, protect consumers, maintain stability, and to maintain public and industry confidence in the country’s financial system – a particularly important job in recent times.
Professor Barrell advised: “Projection rates should be set at a realistic level, and the financial crisis required that the maximum projection rates should be reduced.
“People will have to save more for their pensions or work longer in order to cope with these lower rates of return.”
The publication by the Financial Service Authority is available to download from their website.