The watchdogs wait for a 'crime' to take place before moving in. That's always been the way.

Despite what consumers may think there is no financial supremo checking financial products before they are unleashed on the public, no financial expert checking everyone involved in a financial business has an unblemished record, no spot checks on marketing brochures over-promising and under-delivering.

That may be changing, a bit.

This week the FCA announced it was going to push firms with unused permissions to give them up if they are not using them. Permissions are a key part of the regulatory process and allow firms the right to undertake certain types of regulated business if they have regulatory approval.

For example, most advisory firms, except the largest, do not have the right to hold client money, they mostly act as intermediaries with the money held by third party fund managers.

This alone is one of the biggest protections for investors if a firm goes bust. If a firm fails at least the money is held by someone else.

In its latest move to be more assertive the FCA says it plans to nudge firms to relinquish unused permissions and this is a wise move. There are signs that some firms have hung on to permissions they no longer need or intend to use. One risk is that the firm could be taken over by rogues with all sorts of risks.

So the FCA is to applauded for taking a small step to tighten things up. I suspect it has been stung by criticism of its slow response to firms which have pushed bad financial products, using the permissions they had, and then failed.

I do not think, however, that the change marks a wholesale move to advance checking of financial products and firms. That would require a regulator 10 times bigger than it already is and it is not going to happen.

There is room, however, for the FCA to run a better ship and for it to nip things in the bud much earlier. I envisage a further tightening of the rules covering regulated firms in the coming years. Risk mitigation will be the theme.

The public will never understand how the rogues and the scammers can seemingly get through the regulatory hurdles in the first place but that’s a topic for another column. It is, though, a very good question.

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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and mainstream news. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days. Follow @FPT_Kevin