Apfa chairman Lord Deben has called on the FCA to deliver “light-touch regulation”.
Speaking at the Apfa annual dinner in London last night, Deben said he is “amazed” at the level of regulation imposed on financial services.
He said: “I look to the FCA for light-touch regulation. I’m amazed at this Government, which is very keen on not regulating, except when it comes to financial services.
“I wonder why the only area regulation is increasing is financial services, and the most trusted people within that area: advisers. I want the FCA to recognise that regulation can be effective only if it is seen as an ally of good practice.”
Deben warned that excessive regulation risks stifling innovation, and leaving the financial services industry “stuck in the past”.
He said: “I want the FCA to recognise the biggest danger we have is that innovation will be lost. So far, increasing regulation has meant that it has been easier for the regulator to say no than to say yes.
“In many cases they have said no because they just don’t want to have the hassle of maybe getting it wrong.”
Deben added that Apfa will not bow to calls to be a “louder” trade body.
He said: “Some people say why aren’t you louder, why don’t you scream more, attack more. I don’t want to do any of those things because I want to win more. And you win by working with the people who are on your side.”
FCA chairman John Griffith-Jones, also speaking at the event, said the regulator has worked hard to allay advisers’ concerns over the complexity and clarity of its rules.
But he conceded there is still “a little bit of an issue” over the commonly understood meanings of the words advice and guidance, and restricted and independent.
He said: “The RDR was always designed to create the framework for the industry to turn itself into a genuinely qualified profession.
“And now we are seeing this transformation happening in practice and we want to support the progress that is being made. When we talk about professionalism it is about much more than exams and qualifications – it is a state of mind.
“And we have all learned, somewhat painfully from the banking sector, that the tone at the top is absolutely no substitute for the tone at the till.
“The age-old parable ‘do as you would be done by’ lies at the very heart of good advice. If you would be happy to sell it to your mother in law, you’re probably happy to sell it to anybody.”
Griffith-Jones added that the regulator is currently carrying out its post-implementation review of the RDR, and has an obligation to make as thorough an assessment as possible as to whether the legislation has been worthwhile for consumers.
He said: “The RDR has not been a cost free exercise and we as a regulator must be big enough to admit that we may not get things completely right first time round.”