Thomson's group chief executive Douglas Gardner is not a man who takes negativity lightly and nay-sayers are one of his pet hates. “If you're going to take a can't-do attitude with me, then you had better have a very good reason for it,” he says, showing his disdain for an attitude he believes has done a lot of harm to the industry he has worked in for the past 22 years.
The conversation at present is concerned with regulationdodging – setting up or altering your financial services business to avoid being regulated by the FSA. He tells me that a couple of weeks ago he was having an argument with the director of a rival company over the regulation of home reversion. Gardner says the “peer director” was worried that the FSA was going to regulate home reversion, where the director's mortgage broker does a lot of business.
“If the Treasury changed its mind and started regulating home reversion, he believed this would ruin the sector. I told him he was bloody stupid. Without regulation, home reversion had the potential to be the next scandal – little old bluerinse ladies being ripped off by devious brokers.”
Like many in the industry, Gardner did not accept the FSA's line that it should not regulate home reversion as it is not a loan. However, unlike many industry figures – even at chief executive level – Gardner was able to voice these concerns straight to the regulator in a way that would be heard – sitting on the FSA's practitioner panel.
“Strictly speaking, home reversion is not a loan but the moral argument for regulation is much more convincing and this is what the Treasury and the FSA were ignoring for a very long time.”
Gardner has been one of the more outspoken members of the panel in recent years, projecting a shoot-from-the-hip-type of attitude backed up by some deep convictions and insights into financial services and of late he has spoken out over home reversion, EU directives, depolarisation and professional indemnity insurance.
He believes in the idea of greater involvement with the EU but sees some very clear dangers that need to be addressed. He sees dangers for UK consumers who could see a wave of misselling from European financial services providers coming from implementation of the investment services directive in January which allows firms from other EU countries to sell in the UK and be regulated by their home jurisdiction rather than the FSA.
Gardner was one of the first to signal the professional indemnity problems that the ISD would bring to the UK, with the additional PI or capital required, and he now predicts that the industry will lose a third of its advisers at the start of 2005 when the directive is implemented. He believes the industry was let down by its regulator and the Government: “The Treasury and the FSA sent their B team over to Brussels to negotiate for us and the result will be the devastation of a third of the industry. I am sure we could have gained a fairer deal for the industry but the FSA was not up to the job.”
Gardner says the FSA's actions are quickly moving the industry from caveat emptor to caveat vendor, stifling innovation and growth of the industry. He is equally damning of the Treasury select committee which he says should be an effective sounding board for industry issues but is full of “political climbers bent on furthering their own careers.
“The industry has certainly taken some deep jibes from the committee but on most issues I can't see how it has helped either the consumer or the industry. Soundbite politics is not helpful and the committee seems incapable of offering anything but this type of commentary.”
Gardner is slightly less critical of the new leaders of the FSA, however, with Callum McCarthy in the top job and John Tiner as chief executive. He says he is still confident that McCarthy's track record for slimming down regulators – earned from his Ofgem days – is showing signs of breaking through and is an “attractive alternative” to the days of Howard Davies. However, he believes McCarthy has started off by simply looking for quick wins to show the industry that he means business.
“With episodes like Standard Life, big fines for big hitters and the heavy hand on split caps, McCarthy is saying: 'If you think you can work against me, think again.'” But Gardner still seems slightly suspicious of the FSA's intentions, believing its actions look to be leading to what is easier for the regulator rather than what is easier for the industry.
He says: “It is a fair question. When the FSA and the Treasury's inability to effectively lobby the EU leads to massive drops in IFA numbers and depolarisation leads to further consolidation, it is obvious that this will make managing the industry far easier for the regulator.
“There will be fewer and fewer small, independent firms and what nationals and networks will be left will become bigger and bigger. I am not convinced this is healthy for the industry.”
Gardner has been head of a growing national IFA since 1996, now with 360 RIs and 26 offices. He came to Thomson's as director of its Leeds business in 1989 after working as a life and benefits consultant for six years.
He led the management buyout of Thomson's in 1997 and then an agreement with European firm AWD Holdings AG in 2001, which saw the birth of the first “pan-European IFA”.
Outside the office, he is a keen sportsman, following rugby and tennis in particular. He counts as one of his greatest heroes Martin Johnson, believing England's Rugby World Cup victory to be due to “sheer excellence in leadership”.
Great leadership and overcoming adversity are the two things that impress Gardner the most. He has also been influenced greatly by World War Two flying ace Douglas Bader who lost his legs before the war and still managed to shoot down 22 enemy planes.
“People like Bader are tremendous inspirations to us all. To fight back and succeed no matter what the adversity takes a truly exceptional character.” Fitting heroes for an industry he believes is about to face its toughest times yet.