Treasury select committee chairman Andrew Tyrie is vowing to keep up the pressure on the FSA after it swiftly dismissed the committee’s recommendation to delay the RDR by a year.
Yesterday, Tyrie wrote to FSA chief executive Hector Sants to express his anger over the regulator’s decision to reject the TSC report’s key recommendation in an embargoed press release published alongside the report.
Sants responded today by assuring Tyrie the FSA is taking his report seriously and suggesting the FSA will soon be publishing guidelines for eligibility for waivers from the RDR as well as looking at “further mitigating action” to help IFAs meet the RDR deadline.
In an interview with Money Marketing following publication of the letter, Tyrie says: “The death of Parliament has been greatly exaggerated and this will not be the end of the matter. I have no doubt when we next see Hector and the FSA’s chairman Lord Turner that this is an issue we will want to raise. We were very disappointed.”
He says the intentions of the RDR look “broadly right”, but that it needs to be implemented carefully to ensure the advice community and the interests of consumers are not damaged.
He says: “We are asking the FSA to think again, to show some common sense. With some adjustment, we think the proposals may be appropriate, but now we need to implement this with great care and it is with that in mind that our recommendations have been framed. We are talking about these IFAs’ livelihoods and thousands of savers who may be disadvantaged if we get this wrong.”
Tyrie adds the episode is a good example of the behaviour shown by the FSA which has lead the committee to launch an inquiry into the accountability of its successor body the Financial Conduct Authority.
He says: “It tells us so much about what people privately tell us of the FSA- that they simply do not listen enough. There should be someone keeping an eye even on these powerful regulators, everyone should be accountable to somebody.”
The TSC’s report on the RDR, published over the weekend, calls for the January 1, 2013 implementation date to be put back a year to give advisers more time to meet the QCF level four qualification requirements, alongside a softening of the cliff-edge deadline for experience advisers. The FSA released an embargoed response alongside the publication of the report which rejected the MP’s key recommendations and stated it remains committed to the January 1 2013 deadline.
Tyrie’s letter to Sants says: “We deprecate the Authority’s action. It was precipitate, giving the impression that no adequate consideration had been given to the arguments for the delay we recommend. This is unacceptable.”
In this week’s Money Marketing, Treasury select committee members attacked the FSA for showing “arrogance” and “contempt” for the committee in swiftly dismissing its recommendation that the retail distribution review should be delayed. Labour MP George Mudie (pictured right) says: “Accountability is a hot issue at the moment and this is a case in point. We put a considered view to the FSA and, without much thought and with some arrogance, it pre-emptively told us where to go.”
Conservative MP Andrea Leadsom says: “It is astonishing the FSA would rule it out of court when it was a very strong recommendation and pretty disgraceful that it would get its retaliation in before the committee’s paper was officially published.
“It shows real contempt for the considerable work that went into the report and it is a complete two fingers up to the committee.” Liberal Democrat MP John Thurso says: “Maybe it shows that seeing as the FSA is disappearing it has decided not to bother too much any more.”
Conservative MP Mark Garnier says: “The FSA has had a look at the report, shrugged its shoulders and said it is not going to bother with it and banged out a press release in response without even letting us know first. It is pretty unimpressive.”
Labour MP Andy Love says: “We were trying to find a proper balance between the needs of consumers and the difficulties some IFAs are facing in meeting the requirements. I was surprised at how quickly the statement came out but I would hope they would give some consideration of the points we were trying to make.”