UK regulator, the Financial Services Authority, is to explore ways that consumers can be helped to understand and protect their financial interests more effectively.

Through its discussion paper, “Consumer Responsibility”, the FSA hopes to achieve better decision making by consumers, improve their understanding of what happens when financial affairs go wrong and reduce complaints.

The FSA said that this drive towards education is part of a two-pronged approach to achieving its consumer protection objectives, the first of which is the enforcement of standards within financial firms.

Dan Waters, FSA director of retail policy and conduct risk, said: “All firms have been warned that they face stronger and more intrusive regulation to ensure they are aware of their responsibilities to treat customers fairly.

“However, we also believe that markets will work more effectively if consumers are more involved, more capable and empowered. 

“We acknowledge that this is a debate that elicits strong feelings on both sides and we are keen to try to find common ground in order to contribute to better understanding and better outcomes for consumers in financial services markets.”