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Andrew Tyrie: RDR advice gap risks consumer detriment

But TSC chair says it is too early to review the impact of the RDR.

Treasury select committee chair Andrew Tyrie has raised concerns that the advice gap resulting from the RDR poses a risk of consumer detriment.

Speaking at the Apfa annual dinner in London last week, Tyrie said there is “now a risk, possibly a considerable risk, of consumer detriment” as a result of the “marked” reduction in adviser numbers and the number of providers which have left the advice market since the RDR.

But he said it is too early for the Treasury select committee to review the RDR’s impact.

He said the committee recommended the FCA carry out regular reports on levels of saving and adviser numbers following the introduction of the RDR, and intends to hold the regulator to that.

But Tyrie said: “Should the TSC restart the investigation? Not now.

“The RDR has only been going for a year, and it will take at least two years for the full impact of the changes to work through the profession.”

Tyrie also hit out at the regulator for relying too heavily on “mindless data collection”.

He said: “We have far too much box ticking and mindless data collection and absence of the use of judgment by regulators in demanding information from the regulated community, with the view to regulators minding their backs.

“That really has to end. We have to have more intelligent reporting requirements.”

Pilot Financial Planning director Ian Thomas says: “The RDR will take several years to work its way through the system before we can judge whether or not it has been a success. When that point comes, it is good to know the TSC will be able to hold the regulator to account.”

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  1. Most intermediaries agree wholeheartedly with Mr Tyrie’s statement that “We have far too much box ticking and mindless data collection and [a complete] absence of the use of judgment by regulators in demanding information from the regulated community, with the view to regulators minding their backs.”

    Yet John Grifiths-Jones appears to have dismissed this accusation by describing the FCA’s data collection requirements as “pragmatic”, which appears to suggest that the FCA has no intention of moderating them.

    Experience tells us that the TSC’s biggest handicap is that it has no powers to force the FCA to do anything at all. So any request that the regulator should undertake a thematic review of its data collection policy and submit its proposals for consideration is likely to be met with a response no different from that put forward by Hector Sants to the Committee’s request that the FSA’s Red Button Day for implementation of its RDR, which was basically Get stuffed, we’ve set a date of 1.1.2013 and we’re not going to change it for you or for anyone else. That provoked a tut-tut letter from Andrew Tyrie, a token apology from Sants about the swiftness and abruptness of his response and nothing changed. The FSA’s timetable for implementation was a fait accompli, no matter what anybody else might have had to say about it.

    Unless and until an Independent Regulatory Oversight Committee with real and unassailable authority over the regulator is created, nothing will change. The difference would be that instead of politely and tepidly asking the regulator to reconsider its policy on any particular issue, an IROC would be able to ORDER the regulator to come up with a revised one, within three months, submit it for scrutiny and impose whatever changes it considers appropriate, whether the regulator likes them or not. As I see it, this is the only way of tackling the present deeply unsatisfactory state of affairs whereby the regulator enjoys carte blanche licence to set and to pursue its own agenda without reference of accountability to any outside body.

    Why isn’t APFA pressing for this?

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