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David Severn

I t is a question of gamekeeper turned poacher, as has been said many times since it was revealed that David Severn, currently head of head of retail investment policy at the FSA, becomes Aifa director general next month. But can Severn really pull off the top job in IFA lobbying or will he find it hard to drop the habits that public service has bred into him over the past 35 years?The election by Aifa’s appointment committee, made up of four adviser members of Aifa’s council, was unanimous. When Severn joins, director of policy Fay Goddard will extend her role to include mortgage advice while Association of Mortgage Intermediaries director Chris Cummings will become Aifa deputy director general, working with Severn to lobby the FSA and Europe.

It has already been said that short of appointing the industry-bashing former minister Helen Liddell, it is hardly possible to imagine moves to make IFAs’ blood boil more and the industry was in a furore when it was revealed that Aifa expressly prohibited IFAs or individuals who had previously been IFAs from becoming director general of the organisation.

But now that the decision has been made, it is worth looking at Severn’s track record and areas of expertise to see, as Aifa obviously believes, it fits with what is required for the new role.

Not a lot is known of Severn outside his life as a civil servant and a regulator. He says he and his wife share a passion for horseracing and are interested in natural history and gardening and he claims he is not an anorak. He also enjoys reading although he says hard work and advancing age mean it is more often Agatha Christie than Jane Austen these days.

Arguably, Severn’s defining moment in the eyes of IFAs has so far been as the architect of depolarisation. He headed the review of polarisation in 2001 that started with considering lifting restrictions for the sale of stakeholder pensions, Cat-standard Isas and direct-offer financial promotions pushing products. The result of the review was an FSA U-turn and the axing of polarisation.

Severn was also a key figure in scrapping the defined-payment system in favour of the menu. Although contentious and hardly embraced wholeheartedly by the industry, there are hints that Severn’s part in the affair was, at least in his eyes, an attempt to make life fairer for IFAs.

In October 2001, Severn questioned the practicality of multi-ties at an FSA open meeting on polarisation, saying he had doubts as to how consumers would benefit if the only result of change was IFAs fleeing the sector to become multi-tied.

Early last year, Severn tried to allay IFA fears that depolarisation would be their undoing. He said he did not believe that many current tied players would be able to take advantage of the changes to the distribution regime and that IFA businesses were best suited to mount a challenge to tied sectors if they split their businesses and set up a multi-tied operation serving the needs of the lower end of the market.

It can also be argued that he has the skills and experience to negotiate with Europe as it impacts into the running of IFA businesses.

The problem most IFAs have with Severn heading Aifa is that he has sat on the other side of the fence for such a long time that it is inconceivable for many to believe he would be able to make such a drastic change.

Severn has been with the FSA since its inception. The entire time, he has essentially been responsible for policy on matters that affect the retail market. Over the years, this has included EU directives, distribution arrangements, standards of advice, disclosure requirements and pension issues.

For much of his time at the FSA, Severn did not monitor the activities of authorised firms. Instead, his role involved developing FSA policy, which meant for a long time he was not in direct and constant contact with IFAs.

But Severn’s experience in regulating the financial services industry is further reaching than just the last six years. From 1994 to 1998, he was head of policy development division at the PIA where he spearheaded the Evolution Project which was a review of all the rules governing the retail market and which was designed to put regulation on a risk-based footing.

At the PIA, he also introduced the training and competence scheme for financial services.

Prior to this, Severn was deputy director of the Securities and Investment Board where, among other things, he was in charge of the authorisation of unit trust schemes, designing policy on the compensation scheme and dealing with intermediary issues.

Severn has not spent his entire life as a regulator. The first 19 years of his career were spent at the Department of Health and Social Security as an adviser. During this time, he advised ministers such as John Major and Tony Newton on public expenditure issues.

He also served as private secretary to Sir Geoffrey Otton and managed a major computerisation project for the department. In a role that saw Severn responsible for a number of different portfolios in the DHSS, he was also responsible for pension, benefit and NIC operations in DHSS local offices and developed new benefits such as the statutory sick pay scheme.

Largely, it is Severn’s keen knowledge of Whitehall and Westminster that Aifa has bought, coupled with the relationships that this has fostered. Added to this, Severn’s comprehensive understanding of regulation – having designed a lot of it – should give Aifa an inside edge when dealing with the FSA and Europe. Given a chance, IFAs can hopefully reap the benefits of these attributes.

Born: 1948Status: Married, no childrenLives: SurreyCareer: Pre-1969: Administrator in the trustee department of a bank; 1969-1987: Adviser, Department of Health and Social Security; 1987-1988: Secretary to the Building Societies Commission; 1988-1994: Deputy director, SIB; 1994-1998: head of policy development division, PIA; 1998-2004: head of retail investments policy, FSALikes: Horseracing, natural history, gardening, reading


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