Regulator must keep a close eye on pre-RDR progress
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It was no surprise to see the FSA reject the will of the Treasury select committee and press ahead with the current RDR timetable.
With most advisers making great strides towards achieving the new requirements, and given the backdrop of small firms battling the economic conditions and possibly the bigger hurdle of business transition, a more balanced and pragmatic regulator may have agreed with MP demands for a deadline extension.
Unfortunately, our current regulator rarely displays either attribute.
However, there has been a marked shift in the FSA’s rhetoric and we will be holding the regulator to its word when it says it will continue to monitor the industry’s progress towards the 2013 deadline carefully.
If it appears progress is slowing or less optimistic than its current data implies, the regulator should be prepared to add more flexibility to the current cliff-edge deadlines. Adapting policy to take account of market trends is a sign of regulatory strength, not weakness. You would expect the regulator to show leniency to those who may be an exam or two short by the start of 2013. Policymakers should be looking to ensure as many good advisers as possible stay in the industry.
This episode will figure highly in the Treasury select committee’s inquiry into the Financial Conduct Authority. With a number of TSC mem-bers on the committee scru-tinising the bill that creates the new regulator, this may be the last time that a financial regulator can so flagrantly ignore the desire of Parliament.
Paul McMillan is editor of Money Marketing - follow him on twitter here
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Readers' comments (17)
LeeD | 10 Nov 2011 12:29 pm
Speaking of "rhetoric," how, exactly, do you intend to hold the regulator to their word?
The TSC tried - and failed - to steer the FSA. I doubt MM have anything in the locker that will compel the FSA in any direction once they've set their mind to it.
"We'll report the things we think are bad" is not the same as "holding them to their word." Not even close.
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Chris Miller | 10 Nov 2011 12:37 pm
Sadly the FSA has the power of Stalin, but the incompetence of Mr Bean.
I wouldn't trust them to ''keep their eye' on anything apart from their fat bonus packets and ramping up their bloated cost-base to force down the throats of their powerless victims.
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Anonymous | 10 Nov 2011 12:47 pm
The timetable should be retained if for no other reason than to get this boring, repetitive RDR issue over and done with. The FSA/FCA must then be held accountable for the mayhem that will unfold post January 2013, and be prepared to take responsibility for any consumer detriment caused as a result.
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Ian | 10 Nov 2011 1:38 pm
'You would expect the regulator to show leniency to those who may be an exam or two short by the start of 2013.' - why, given level 4 is easy to attain.
Anyone who can't bothered to put the work in to achieve level 4 shouldn't be allowed to continue post Dec 2012.
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Chippy Minton | 10 Nov 2011 2:06 pm
Wow - I wish I was as bright as Ian. He must be so smart and cleaver. I would imagine that he is clearly a lovely person to work for and his advice must be first class. No compassion though.
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Anonymous | 10 Nov 2011 3:30 pm
Too right chippy
ian could get a job at canary towers with that attitude.
Maybe exams do not present a problem for him but surely
he could show a little sympathy for those who may not have been in a classroom for 30+ years.
but no he would rather show his own smug self righteousness.
Hope he feels the same when he is 3 years away from retirement and some muppet tells him to requalify at the same time he is running a business in the worst recession the country has ever seen.
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Ian | 10 Nov 2011 4:29 pm
Chippy and Co
With respect if you think 'I have an attitude' by telling it as it is then so be it.
I'm not smart, but could be bothered to put the time and effort in to pass the required exams.
If you can't pass basic exams then you are in the wrong job. You have ample time to study and sit them.
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Stephen Cooper | 10 Nov 2011 4:53 pm
In defence of 'Ian', and against 'Chippy' and 'anonymous', if you are a good practising IFA, Level 4 exams should not be that difficult, as like it or not, they cover what you are most likely doing on a day by day basis. Exam technique is however a different matter, and I have been out of the classrom for 38 years now!
But to return to the thrust of this article, the FSA ae so strongly set on RDR that they will not be moved, and one suspects that if necessary, they will massage any evidence required to show that the required level of progress is being made.
And as for 'Policymakers should be looking to ensure as many good advisers as possible stay in the industry', it is too late, as the 'cull' of advisers is already well under way - I'm sure we all know some who have left already - I know of 3 firms no longer trading because of the new requirements!
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Anonymous | 10 Nov 2011 5:22 pm
Chippy, they have introduced multiple choice exams for people who have trouble writing. The answer is in front of you, just pick it. A monkey given enough attempts would pass.
I don't work in financial services but are often amazed that IFAs expect people to come to them for financial advice when they are incapable of passing a few multiple choice exams over several years in their own field of work.
And they call this professionalism. You should be ashamed.
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Chippy Minton | 11 Nov 2011 4:09 pm
Hi Anonymous @ 5:22pm and Ian
I think you misunderstand me. I support professionalism and I have level 4 myself and some more. I just thought that Ian's dismissal of those that are struggling was a little heartless.
I have advisers in my own practice who are great advisers in specialist areas but are struggling to pass exams in areas on which they do not advise.
We are told that we need to become specialists rather than GP's but the exam system does not recognise this.
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