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Advisers reflect on Martin Wheatley legacy

Martin Wheatley 2 2013 700x450

Advisers have questioned the departure of FCA chief executive Martin Wheatley, warning his successor must not take the regulatory regime “back in the wrong direction”.

Earlier today the FCA announced Wheatley will step down in September, after Chancellor George Osborne said the regulator needs “different leadership”.

FCA director of supervision Tracey McDermott will take over as acting chief executive until a permanent replacement is appointed.

Jacksons Wealth Management managing director Pete Matthew says: “From an adviser perspective the regulator has made some good strides in the last few years.

“There is still some way to go, particularly on regulatory costs, but I hope the new chief executive does not take the regulator back in the wrong direction.”

Philip J Milton & Company managing director Philip Milton says: “This is an incredibly difficult job and if the Government does not have anyone in mind to replace Wheatley, I am not convinced they will find anyone better.

“There have been some mistakes but generally he has kept his head down and got on with the job. Having change at the top could create uncertainty for advisers and the markets.”

Yellowtail Financial Planning managing director Dennis Hall says rising regulatory costs and banking scandals such as Forex and Libor have happened “on Wheatley’s watch”.

But he adds: “The dialogue between the regulator and firms has improved under the FCA, as has signposting to the issues the regulator plans to look at. There is nothing obvious that he has done wrong.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Perhaps it would be useful if the bodies who claim to stand up for the adviser community now petition the Chancellor directly with a robust, balanced proposal for what we want to see from the next era of the FCA. In particular the FCA/FOS/FSCS should acknowledge the fact that advisers are also in a new era of professionalism and transparency, so they should stop penalising today’s advisers for the failures of the previous era.

  2. Julian Stevens 17th July 2015 at 8:04 pm

    There seems to have been no reduction on his watch in the number of train wrecks that the regulator could and should have averted had it acted more swiftly and decisively upon receiving information that things were going awry in certain quarters. The next one about to blow up mightily is Connaught.

    And I’m not prepared to forgive him for having flatly and insolently rejected Andrew Tyrie’s proposal that the FCA is, at the very least, under a strong moral obligation to reimburse the intermediary community the £118m we were overcharged by the FSA. Like the FSA before it, the FCA has no sense of moral obligation, so what happened instead? The FCA overspent its budget last year by £58m, it refuses to shut down its perennially-in-deficit final salary pension scheme (as would just about any private sector company), it’s hiked our levies by 20 times the rate of inflation and has awarded Wheatley a 15% pay rise. No sign of any cost cutting except perhaps its planned relocation to Stratford, which will probably cost £50m.

    The FCA, again on Wheatley’s watch, was also roundly lambasted for the bungled handling of its proposed review of closed life and pension books and THEN spent inxs of £3m on an independent investigation (with lavish allowances for those concerned to receive legal counsel). The conclusions of that investigation were that the FCA is guilty of a whole slew of failings for which it would drag over a bed of hot coals any of the firms that it regulates. The FCA, under Wheatley, is still as hypocritical and as unaccountable as ever was its predecessor.

    Also on Wheatley’s watch, the FSCS quietly and without announcing it, let alone anything in the way of any consultation, decided to assume responsibility for compensating investors for losses arising from failed unregulated investment schemes, which it never used to. Hence, our FSCS levies are rocketing and poor old Mark Neale, who now finds himself having to scrape by on a mere £300,000 p.a. announces that the funding of the FSCS is “working fairly well”. Damned if it is from where I’m sitting. All that’s changed is that we’re having to pay shedloads more in levies.

    Andrew Tyrie and the rest of the TSC are also increasingly irked by the FCA’s perennially contemptuous attitude towards it, whilst no meaningful progress at all has been made on the issue of the FCA’s pernicious denial to intermediaries of any longstop against stale complaints.

    So just what ARE Martin Wheatley’s positive achievements? I’d like to see them itemised so we can compare them with all the things that haven’t improved in his watch. The debit column, I suggest, is considerably longer and more unsavoury than the credit column.

  3. Trevor Harrington 17th July 2015 at 8:59 pm

    Julian,

    As you rightly say, the list of negatives is much greater than those which you highlight, and I am also struggling to see any positives whatsoever resulting from his tenure.

    Julian, I think you are being kind.

    I also suspect that we are about to discover all sorts of golden handshakes and gifts to the departed, which are only available to him because he has voluntarily “stepped aside”, presumably having been told that he will be fired unless he does so.

    I said the same last year when he magnanimously (apparently) refused his bonus – quite obviously, and as I said at the time, it was simply deferred to the this year, and he has now collected it.

    This sort of outright abuse of public position in this country, is actually not far away from the antics in the public sector in Greece, certainly in the deed if not in the commonality – it has to stop, if we are to avoid similar consequences.

    Abuse of power, is particularly repugnant when it is perpetrated by those who are specifically charged with leading and policing a community. A policeman falsifying his “bad back” in order to gain an enhanced early retirement from an already overly generous pension scheme, is just as criminally fraudulent as a regulatory leader, who refuses to listen, plays out a failed policy, destroys 25% of the businesses in his oversight, pretends to refuse a bonus and then takes it, and worst of all, cocks two fingers at the Treasury Select Committee who are charged with governing this Country.

    Watch out for the next announcement of his severance package ….

    As you said Julian …. we could go on ….

  4. Julian Stevens 18th July 2015 at 5:02 am

    I forgot to mention the £3.2m of OPM that the FCA, again on MW’s watch, has thrown down the drain on that aborted IT project. As if £3.2m wasn’t in itself a wildly profligate outlay, the FCA hasn’t even used what it paid for. Sound economic management most definitely isn’t his forte.

  5. 20 questions. Under Martin Wheatley’s leadership of the FCA:-

    1. Have the costs of regulation done anything other than escalate at an even steeper rate than they did under the FSA?

    2. Have the burdens of compliance done anything other than become even more onerous than they were under the FSA?

    3. Are the FCA’s consultations any more meaningful than they were under the FSA?

    4. Have the costs of providing advice done anything other than increase exponentially?

    5. Has consumer access to quality financial advice improved?

    6. Has there been any progress towards a framework for streamlined/simplified advice?

    7. Has there been any progress towards the restoration of any sort of longstop for advisers (beyond yet more meetings with APFA which, in reality, have yielded nothing of any concrete value)?

    8. Is the FCA any more accountable than was the FSA before it?

    9. Are the standards of the FCA’s interaction with the TSC any better than those of the FSA before it?

    10. Has the FCA proved itself to be any more responsible in terms of how it manages its budget than was the FSA before it?

    11. Has the FCA made any effort to rectify the perception that the NAO’s oversight of its finances is anything other than a bit of token window dressing?

    12. Is the FCA perceived to be any less wasteful than was the FSA before it?

    13. Has there been any reduction to the number and severity of motorway pile-ups that the FCA could and should have averted had it acted swiftly and decisively on information known to be in its possession before the institution in question came apart at the seams and plunged to earth in flames?

    14. Has the FCA offered any explanation as to what it actually does with the RMA data that, under threat of cancellation of their licence to trade if they don’t cooperate, it requires intermediaries to submit to it periodically?

    15. Has any effort been made to reduce the colossal size of the FCA’s rule book?

    16. Has there been any diminution of the widely held perception of the FCA that it’s a gravy train for the fortunate few?

    17. Has there been any change to the FCA’s policy of awarding handsome pay-offs to those found to have failed to discharge in a competent manner their regulatory responsibilities?

    18. Has the FCA taken any steps towards capping the burden on the industry of the deficit with which its DB pension scheme is perennially afflicted (and upon which most people consider the PIA should never have embarked up in the first place)?

    19. Has the FCA offered any explanation of, let alone justification for, the FSCS having taken on responsibility for investor losses incurred as a result of failed unregulated investment schemes (which it never used to)?

    20. Has the FCA ever once admitted its own failings on anything instead of routinely seeking to shift the blame onto other parties, i.e. us?

    Answers on a postcard please.

  6. I would suspect there is more to this than meets the eye ! Not wishing to side with MW (I still think he was bloody useless) but what really is G Osborne’s objectives ? maybe this is scarier ?

    We all know the regulator especially the FCA is to political, and IMHO the treasury couldn’t give a toss, about cost, they don’t pay, they don’t give a toss about miss-selling they don’t pay, however they do get lots of tax with the new pensions freedoms if people take the lot ?

    Now ? will Tracey rub George’s belly on command, you bet she will and any new comer will as well !

  7. Whilst Wheatley promised the FCA would be a different creature to the FSA the outcome is a sheep in sheeps clothing.

    Sants told us to be very afraid. Wheatley wanted to shoot first and ask questions later.

    Osborne has an opportunity to reflect on the concerns raised by the TSC and the industry and appoint somebody with industry experience, common-sense and a clear understanding that if you milk the cow four times a day the creature will eventually die.

  8. Elsewhere, it’s reported that the search for a successor is to be worldwide, so we may end up with an appointee of foreign heritage. FWIW, my nomination would be Keith Richards.

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