Andrew Tyrie letter slams FSA RDR dismissal
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Treasury select committee chairman Andrew Tyrie has written to FSA chief executive Hector Sants describing the regulator’s rapid dismissal of the committee’s recommendation to delay the RDR as “unacceptable”.
In the letter, sent yesterday, Tyrie says: “You will be aware that last Thursday the FSA circulated an embargoed response to our RDR report, rejecting in a peremptory manner our recommendation of a one year delay to the RDR’s introduction. This was issued within hours of the embargoed copies of our own report being distributed.
“The committee has discussed this. 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.
The TSC’s report on the RDR, published over the weekend, calls for the January 1, 2013 implementation date to be delayed by a year to give advisers more time to meet the QCF level four qualification requirements, alongside a softening of the cliff-edge deadline for experienced advisers.
The FSA released an embargoed response alongside publication of the report which rejected the MPs’ key recommendations and stated it is committed to the January 1, 2013 deadline.
Labour MP George Mudie 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.”
The FSA has yet to respond fully to the report but Cicero Consulting director and chief corporate counsel Iain Anderson says the quick response sends out a deliberate message. He says: “The FSA has tried to kill the TSC’s recommendation dead but I do not think it can. The opposition will pick it up and there have been a lot of Conservative backbenchers interested in this.”
Labour Shadow Treasury financial secretary Chris Leslie says the FSA’s rebuttal of the committee’s recommendation is “unsatisfactory”. He wants the regulator to show there will not be a shortage of advice after the RDR.
He says: “If the regulator does not do that, we will be asking questions of the Treasury to explain what it is doing to counteract that reduction in advisers. It might well be that we look to table debates on it, but even ministers are hamstrung in what they can do to affect regulators.”
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Readers' comments (22)
Anonymous | 21 Jul 2011 10:04 am
Why should the TSC be any different to the rest of us?
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Mr Smug | 21 Jul 2011 10:12 am
Only now are the politicians finally waking up to what they have created.
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Anonymous | 21 Jul 2011 10:13 am
Unusually, I agree with the FSA on this one. I am quite new to the profession, and have passed the level 4 exams. I question whether anybody who has had getting on for three years to achieve this qualification deserves an extension of time, or even whether they should be giving advice at all if they are incapable of passing the exams.
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CHARLES HENDERSON | 21 Jul 2011 10:14 am
The Select Committee's request to delay RDR for a year is reasonable. If RDR is implemented on 1 1 2013 there are bound to be many more advisers, some very experienced, leave compared with the number leaving at 1 1 2014. So clients will suffer. FSA say they announced the deadline some time ago but FSA took a long time to finalise the rules.
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Mark | 21 Jul 2011 10:15 am
What I find really frustrating about the RDR, is the fact that I could be forced out of a job because I have not passed exams in areas in which I do not provide advice on. On top of the 16 Years experience I have in the area I advise on, I have passed the relevant exam in which I specialise. If there are areas in which a client requires advice on, I pass on the enquiry to a colleague who is suitably qualified. It's simple, if you have not achieved the exam in the area you haev been asked to provide advice on, ytou cannot prvide the advice, it's not rocket science.
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Anonymous | 21 Jul 2011 10:24 am
I'm actually pleased that FSA have reacted in this way, it shows the true pomposity and arrogance of this organisation. Heads up MP's this is what most IFA's and financial services in general have been dealing with for a long time.
Will elected MP's open up a can of whuppass on this organisations bottom!!
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Harry | 21 Jul 2011 10:28 am
Whilst being no fan of the FSA, I can understand their immediate dismissal on this occasion.
5 years of preparation and countless reminders as to their inflexibility should suffice by now. If further research obviously shows that consumers can benefit from a 1 year delay, it is bound to show they will benefit from another 5 year delay, let alone a complete abolition of the RDR.
So you can understand the FSA saying "enough is enough, we are serious when we say go and get qualified to the level we expect"
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Anonymous | 21 Jul 2011 10:31 am
Financial Advisors have long suffered because they do not have a collective voice, such as the Law Society for Solicitors. This has left them open to being used as a scape goat and a bottomless pit of money when the FSCS and FSA decide to take money from us for the failure of providers such as Key Data. The FSA has got so used to abusing us that they felt they could disregard the Treasury Select Committee's views out of hand. Lets hope the TSC realise the FSA's contempt is primarily aimed at those who pay their inflated wages - the financial advisors.
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Anonymous | 21 Jul 2011 10:36 am
anonymouse 10.13
Will you still feel like that if you are forced to re qualify 3 years before you are due to retire?
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Steve Davison | 21 Jul 2011 10:41 am
Unfortunately the TSC missed the point, they were blinded by all the complaints about qualifications instead of focusing on some genuine reasons for a delay. The FSA must have been mightily relieved when they read the TSC report. The one thing that has been constant is the the need to demonstrate your knowledge, so why make this the main justification for a delay? Yes the FSA have shown arrogance in their preemptive response but the industry and the TSC shot themselves in the foot I'm afraid in my humble opinion.
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