Tories wary of product regulation
Share
Shadow financial secretary to the Treasury Mark Hoban has warned that a move towards product regulation could harm competition and innovation.
At the Tenet annual conference in London yesterday, a delegate asked Hoban if a move to product regulation was needed due to recent regulatory failures.
The delegate said: “We’ve tried advice regulation for three decades now, it hasn’t worked lets move on. What we really need is regulation where the product itself gets regulated and rubber stamped.”
But Hoban said: “If you have products kite-marked it gives consumers more confidence. But equally what we don’t want to see is the process for innovation and competition in the financial services market unnecessarily harmed by product regulation because it could act as a brake on innovation. We need to think quite carefully about how it would work.”
The delegate suggested that if providers wanted to work outside a product regulation regime caveat emptor should apply.
But Hoban said: “I don’t think there is an appetite more broadly to move back to caveat emptor for non-standard products. There is not much support for that amongst regulatory and policy makers.”
Hoban also reiterated Tory plans to continue the implementation of the RDR if it wins next year’s election. He said: “When we announced our plans to scrap the FSA there were some questions of will this effect the timetable of the implementation of RDR. I don’t believe these reforms to the regulatory structure need to impact the time table of the RDR. To allow that process to be disrupted will be detrimental to the industry and consumers.”
Hoban also aired concerns over the recent failings in the structured product market. He said marketing material for the Lehman-backed products was “misleading” and failed to refer to the real risks involved for investors.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
View results 10 per page | 20 per page | 50 per page
Readers' comments (41)
Anonymous | 27 Nov 2009 2:37 pm
Dear Mr Hoban
If there had been product regulation we wouldn't be in this mess today and all those hours the regulator spends on mopping up would be reduced considerably, thereby saving UKPLC and the great unwashed a lot of money.
I have always insisted that advice must be regulated, but it has to be balanced.
Unsuitable or offensive? Report this comment
R Gronow - IFA | 27 Nov 2009 2:54 pm
Isn't it time that leading members of the future Tory Government stopped making unclear and misleading statements regarding RDR?
I'm quite happy to speak my mind on this: taking on board the latest 'twaddle' by Mark Hoban at the Tenet conference, frankly I can see little or no future in my current role as an Independent Financial Adviser - no matter if Labour or Conservatives win the next Election.
In my oppinion neither of them have a clue as to how to draft new Regulation to protect the Consumer and promote the long-term viability of Independent Advice and if this is the case, then I want nothing more to do with this industry.
This Country has gone to the Dogs!
Unsuitable or offensive? Report this comment
Julian Stevens | 27 Nov 2009 3:02 pm
Hogwash. Product regulation wouldn't stifle competition or innovation ~ why should it?
What it would do is place responsibility for the failure of a product approved by the regulator in the lap of the regulator and nobody else. Faced with that, Hector Sants or his successor would find it rather difficult to deflect the blame by talking about things like "collective responsibility".
Product regulation will never happen.
Unsuitable or offensive? Report this comment
Anonymous | 27 Nov 2009 3:08 pm
Dear Mr Hoban
Still siting on the fence I see with more contradictory comments:-
What is a 'standard product' compared to a 'non-standard product' ??
"not much support among regulatory and policy makers" - well of course there is no support - voting for Xmas & Turkeys come to mind - it would be like supporting your own redundacy because we wouldn't need most of these leeches who are bleeding us dry !!
So the Lehman products literature was "misleading" - and yet no criticism for the current government & regulatory system that allowed this to happen at every level !!
Same old... same old ... !!! - 12 years of NuLabour screwing up everything and the country is crying out for some leadership to sort the mess out and you sit there on the fence - no wonder we are all disillusioned !
Come on Mr Hoban, get off the fence and come out with some 'straight' talking - oh I forgot you're a politician !!!
Unsuitable or offensive? Report this comment
Anonymous | 27 Nov 2009 3:31 pm
And that is exactly what the regulator does NOT want. Sants & Co would rather leave the way open to blame somebody else for their "collective intellectual failures" I believe is the soundbite . Sounds like this Hoban guy has been spending too much time talking to the holy grail at canary wharf. Everytime he speaks you could swear it sounds no different to the twaddle spewed forth from the regulator.Has he actually spoken with any IFAs to get their take on things? Probably not, he could not care less what they think. His thinking is probably that we are so fed up with labour we will automatically vote tory.
Do not count on the tories to change anything which will improve our lot. Hoban has already said there will be no longstop for IFAs under a tory government. Our answer should be No Longstop No Vote. I agree with R Gronow it is time to get out.
Unsuitable or offensive? Report this comment
SIMON MANSELL | 27 Nov 2009 3:33 pm
You say you are concerned to ensure that competition in the financial services market is unnecessarily harmed by product regulation.
For a politision in waiting I do not understand your mindset! Mr Hoban your actions or lack of them mean you are increasingly seen as part of the IFA problem and not the solution! It seems to me Mr Hoban that consensus politics is alive and well and that you do not offer anything other that what we have under Labour.
What party in waiting can afford to ignore middle england and the small IFA?By this I mean the votes of 10,000 IFAs', 20,000 support staff and 2 millions IFA clients!
If this is so then please have the courtesy to say so and allow us to cast our vote accordingly. .
Unsuitable or offensive? Report this comment
sicofit | 27 Nov 2009 3:45 pm
This guy will be detrimental to the IFA.
Unsuitable or offensive? Report this comment
Incompetent MPs Award Team | 27 Nov 2009 3:49 pm
We don't need advice from people who know little or nothing. I know of 2 men who spoke directly to this man who is in cahoots with the FSA and his mates at PWC who also are in the with FSA. I'm afarid I don't trust this man anymore than the current Labour riff-raff.
I am also fed up being told by others with less knowledge and expereince how I should run my business. IFAs are the ones to learn from. Therefore Hoban gets my wooden spoon
Unsuitable or offensive? Report this comment
Stephen Pett | 27 Nov 2009 3:59 pm
Some form of product regulation is essential.
There is no hope while the FSA rule as they have no idea whatever how the simplest of products work. They just treat all consumers as congenital idiots and everyone they regulate as crooks, unless they can see a career path.
I gave up trying to talk to them years ago "We don't need the help of the trade Press to get our message across."
78.3% of IFAs we surveyed are scared to even make a suggestion to the FSA - their is NO real consultation, just the FSA forcing often daft ideas on a helpless industry.
The great scandals of the last 20 years should ALL have been prevented by inteligent Regulation. After the event is no good.
Right, they need Vogon translators before it is too late. (For non Hitch Hikers Guide fans, the Vogons came to destroy the earth and would not stop as a planning notice had been posted - in an alien language - on Alpha Centauri)
Unsuitable or offensive? Report this comment
Ken Boyd | 27 Nov 2009 4:01 pm
Put very simply, New labour has never understood how to govern. They are full of targets but never do anything. The FSA is unaccountable, has not mastered their brief and every idea they have introduced leaves the industry in worst shape than when New Labour were elected. FSMA 2000 is an afront in law, does not work and must be repealed as must so many of their mistakes.
RDR is detrimental to the consumer but enables the banks to be as unfair to the customer as their charging systems for o'drafts etc. We, the voter, want a return to the Rule of Law not the idiotic mess we have experienced from New Labour.
Unsuitable or offensive? Report this comment