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Another one bites the dust

The RDR has been something of a hot potato within the FSA since it was first flagged up in September 2006. Dan Waters has now become the latest regulator to drop the spud.

Money Marketing revealed this week that the FSA is restructuring internally to create a new division solely dedicated to retail conduct risk, to be headed up by Waters.

He will move across from the retail policy division.

He’s not the first to jump ship. Amanda Bowe stepped down from her role as head of the retail distribution review after the RDR feedback statement was published last October.

She moved across to the regulator’s financial capability unit as head of strategy, partnership and evaluation, amid market rumours that she was unhappy with the outcome of the paper.

Money Marketing revealed last month that Sarah Wilson, who, while not directly involved with RDR but the FSA’s director of treating customers fairly, had announced her resignation internally.

Despite the loss of such key figures, the FSA insists that the implementation of the RDR will continue, unaffected by the changes.

A spokesperson says: “There is a team dedicated to implementing the RDR and that won’t change. The focus, resources and timeframe will remain the same.”

The FSA says the restructure highlights the regulator’s newly increased focus on identifying, assessing and mitigating risks to consumers. The new retail conduct risk division will also support FSA supervisors and analyse emerging risks across the retail market.

What’s unclear is whether this is a political move from the FSA, or a reaction to current market conditions.

Is the restructure in some way a response to the call from Sir James Sassoon to separate conduct of business and prudential regulatory responsibilities in his review of the tripartite regime for the Tories?

Is the regulator preparing for a Tory government to come to power in the not-too-distant future?

Or is the FSA merely trying to adapt its model to avoid the regulatory failings that have emerged in the current crisis?

Personal Finance Society chief executive Fay Goddard says it’s the latter.

She says: “The FSA has had to restructure because the perception is that it has failed consumers. It is an inevitable reaction to market conditions.”

Technology & Technical founder Kim North says she’s concerned that the RDR will be led by someone with no experience of the issues facing advisers.

She says: “I’m worried that the FSA will recruit someone from one of the big four accountancy firms who won’t understand the issues facing the market. We need someone who knows what it’s like to sit behind a desk and advise clients, not an intellectual with no understanding of financial services.”

Do you think the loss of Waters, or any of the other recent departures, will affect the RDR? What are your thoughts on the restructure? Let me know by posting comments below.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 8th April 2009 at 4:10 pm

    Moving the chairs and desks and job titles around
    It’s all about Retail, retail, retail. What about the BANKS, BANKS, BANKS? THOSE are the institutions that pose the greatest risk to consumer wellbeing, not to mention that of the national economy. It’s all fiddling whilst Rome burns. How do they get away with it year after year after year?

  2. Moving the chairs and desks and job titles around
    Well said Julian and when RDR is implemented and a large number of IFA’s retire then more and more of the ‘middle market’ will be driven towards the Banks where they can continue to be badly treated!

  3. Failed consumers!
    It isn’t a perception, it is a fact. Another fact is that it will happen time and again because nothing is learned from previous calamities, the FSA has been in existence since 1985 and we are worse off as a result, I blame senior management who have shown poor judgement and escaped before the proverbial hits the fan. My concern is that the Leviathan is fatally wounded and will harm small firms who have done no harm to their clients in order to justify (all too late) its existence to the politicians.

  4. Rod Leonard FSI, Finst D 8th April 2009 at 4:39 pm

    Overpaid and Useless.
    Which planet do these highly paid Morons come from.. they tinker and interfere with the IFA market, devastating our number’s ….over charge us at the FSA FOS and FSCS and take away our right to common law, whilst allowing their banking mates to destroy market confidence and require massive support financially, having self destructed the Banking system. All these people are just climbing the rigging of the sinking ship, but eventually they will drown in their own mess. RDR is a dead duck. Finish it off with a bullet to the head.

  5. RDR Roundabout
    It seems that the RDR is a poisoned chalice. Who would want to head up a review that is doomed by the very scope of its remit and is so clearly seen by industry observers as the road to ruin. Who at the FSA actually understands retail financial services? Who at the FSA is brave enough to hold their hand up and say, “Do you know what, this is all nonsense, let’s get back to common-sense issues and leave the market to determine it’s own fate.”

  6. Wake up and smell the regulatory coffee.
    So the FSA insists that the implementation of the RDR will continue, unaffected by the changes! Perhaps the FSA should wake up and smell the regulatory coffee. They may well have been asleep on their watch when it came to the banks but it is now a fact of life that most life offices no longer have the cash to implement RDR – simple as that!

  7. Survival of the bureaucrats
    The moves the FSA is making are designed by the bureaucrats who pretend to run the show, because thats all it is, a ‘show’, to manoeuvre it into survival mode.
    The FSA has totally failed in its role of regulating the banks, in the few years it has been in charge half of those banks have essentially become bankrupt.
    The internal moves of staff are of course their own survival strategies.
    The only way forward is to replace the top people, get rid of the bureaucratic mindset and maybe split the roles of the FSA into two different organisatons. Being the regulator of financial institutions, by far the more important role is too important a job for the likes of the FSA and being the consumer ‘champion’ is incompatible with regulation.

    Just to put this in perspective I ceased, of my own volition, being regulated by the FSA in April 2008 because I was not prepared to continue to be regulated by a bunch of bureaucrats who didn’t understand the macro, middle or micro mortgage markets and were only concerned with doing the bidding of the big banks, in who’s pocket they appear to be. This means that they have now failed the UK economy by not properly understanding and regulating those banks which has led the economy to implode and they have failed the consumer twice, a failing economy and by allowing the banks to screw the consumer.

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