View more on these topics

BSA conference: Variable capital regime should be introduced to broking market

Norwich and Peterborough chief executive Matthew Bullock has called on the FSA to introduce a variable capital regime for the broking market as part of its Retail Distribution Review.

Speaking at the Building Societies Association annual conference in Manchester, Bullock said the FSA has been very slow to pick up on the role of the intermediary in the market.

“They are playing a large role in the industry and at the moment their capital does not reflect the role they play in the system. The truth is that the power lies with the intermediaries in the market and not the providers. I think the introduction of a variable capital regime for brokers is, I would say, a rising certainty.”

Bullock said the broking market once has one third of the mortgage market but this has now increased to two thirds. “That’s a very profound shift in market power.”

He added: “I do think the FSA’s view about where the power lies in the market is just old fashioned.”

FSA director of retail policy division Dan Waters told delegates that the case for a true risk based capital arrangement for IFAs is quite a difficult one to make.

He said: “There are constraints upon us in the directive which means it would be quite difficult to achieve. I wouldn’t close the door on that debate – it’s very much still alive – but we’re also looking at other incentives upon IFAs in terms of capital in the business, especially when they leave the market. We want something to be there in case claims are made as claims can be made for quite a long time afterwards.”

Waters admitted that there are “some very tricky issues” regarding a capital regime for brokers but said it was in the process of consulting on this at the moment. He told Bullock that the FSA was very much aware of the power of distributors.


Lifesearch relaxed about RDR read-across

In the midst of the Retail Distribution Review Interim Report hyper-activity that was last week Lifesearch said it was relaxed about the FSA extending the RDR to protection business, as long as proposals to distinguish advice from sales go ahead.

Multi purpose

As part of a radical shift in FSA thinking, multi-ties could be stripped of their right to be called advisers to create a clear separation between whole-of-market advice and sales.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm