Most Money Marketing readers will know I have always been confrontational over the human rights of IFAs. Nothing has changed my strongly held belief that the Human Rights Act 1998 is being breached because of the FSA’s refusal to apply the law of the land to its procedures and those created for the FOS.
I also feel strongly about its failure to ensure that Walter Merricks and his staff took account of the laws which
still apply to pre-N2 business. With regard to the limitation periods, it was David Kenmir who confirmed to me that the FSA could not override statute.
I recently held a series of meetings with policy-makers and those influencing the RDR debate, first, last October with Hector Sants and then with Lesley Titcomb and her team last December, following which industry consultant Mike Fenwick went to the FSA’s Edinburgh office last month. I then met Aifa director general Chris Cummings and a major network immediately afterwards.
Where am I going with all this? Society needs regulatory balance but I do not see any. However, personal experience has shown me that taking legal action after the event is daft because it is your money the lawyers will gladly spend taking your side while it is also your money the regulators willingly spend defending theirs.
I firmly believe a change of direction is needed despite the loud calls for confrontation to continue. I feel we have a lot to offer the regulators, in fact, decades of experiencing failed regulation at first hand.
Fenwick predicted almost all the problems that have gradually befallen our clients since 1985, yet nobody listened. Why? Was it because powerful lobby groups had the ear of the regulator? Small to medium IFAs have not featured in anyone’s plans despite the fact that they “generate” so few complaints. They still don’t and the evidence is here before us in the RDR, which will create a distribution cartel for the banks, the insurers, the directsales outfits and, of course, the networks. Can anybody tell me how many complaints most of them generate?
You would be forgiven for believing that the FSA is the biggest threat to your existence but at the same time you might not be surprised to learn that it is in fact other EU states that want to get rid of you. Anybody smaller than mid-cap faces the proverbial oblivion within 10 to 15 years so please don’t think that passing a few more exams is your passport to a rosy future with less competition. In order to clarify the situation, this applies to insurance, mortgages, plumbers, electricians and any other small firm.
All financial services firms deserve to be treated fairly, as do all their clients. We have come to the conclusion that consulting is the way forward, engaging with the regulators and encouraging them to see things from the bottom up instead of this top-down approach that has not worked. Small firms are not the problem although they can be part of the solution.
Evan Owen is head of the IFA Defence Union