The Chartered Insurance Institute says it is best placed to fill the potential vacuum that could be created by the FSA’s move to principle-based regulation and become the industry’s “standard bearer” for guidance.
CII group public affairs director John Ellis says when other professions have been faced with “difficult questions” over guidance, they have established a professional body but he points out that the CII is already in place.
Ellis says that through the Personal Finance Society and the Society of Mortgage Professionals, the CII could create the guidance that advisers will need in a principle-based world. He says there is a need for co-ordination to ensure advisers are not bombarded with guidance and the CII’s professional standards board is best placed to oversee this work across the market.
The FSA recently issued a discussion paper about the potential for greater use of industry guidance with the advent of Newcob, setting out the potential for guidance to supplement the regulator’s principles and gain its recognition.
Ellis says: “The question is whether the industry has the capacity within it to do the job. But the alternative is probably a continuation of the emergencies and failures of the past 18 years and a return to prescription.”
Professional priority, p52