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FCA chief Martin Wheatley: If I could do the RDR again…..

FCA chief executive Martin Wheatley would have introduced the RDR more quickly and delivered all the new measures at the same time if he was able to re-run its implementation.

Speaking at a press conference in London yesterday, Wheatley said: “It would have been nice to get everything done in one go. The fact that aspects of the rules have had to wait, so platform commission rules have had to come in a bit later, it would have been nice to get all components of it upfront and delivered in a package.

“But in the real world it is very difficult to do that because inevitably there are either things you couldn’t quite get your head around the first time round, or the situation changes so you need subsequent steps.

“It would also have been nice to have done it more quickly than in six years, but the reality is we are where we are.”

Wheatley also said he did not expect banks and building societies to pull out of the advice market to the extent they did as a result of the RDR.

He said it is “possibly” the case that the FSA or FCA should have foreseen this and put in place measures to ensure lower value clients continued to be served by the advice market. 

But he added: “I do not know what the FSA or FCA would have done or should have done to create a service for those clients. You have to allow people to make those commercial judgements.”

The RDR was introduced on 31 December 2012 with the new platform rules being introduced between April 2014 and April 2016.

Figures released by the FCA at the press conference show the number of financial advisers rose by 1 per cent between 31 July and 10 January, from 21,684 to 21,881. This is likely to reflect more advisers achieving QCF level four during the year and compares to the 25,616 estimated to be operating at the end of 2011. 

The number of bank and building society advisers fell by 23 per cent over the same period, going from 4,604 to 3,556. This is on top of a fall of 4 per cent between the end of December to the end of July, and represents less than half the 8,658 bank and building society advisers operating as at the end of 2011.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. “it would have been nice to get all components of it upfront and delivered in a package.”

    Well you didn’t and you can’t. Please can you talk about what you are going to do going forward to empower advisers to help clients plan for the future.

  2. Surely the way forward for smaller retail clients will be “expert systems” which produce generic advice tailored to age income and family status. We can’t be far off thta happening now.

  3. He was not aware banks and building societies would pull out of the advice market. Where in heavens name was he as he was told by those actively involved that the market would only be available to those who could afford it.. He will telling us next that all consumers are better of now

  4. It is the case that the “Posh Boys” in charge of our financial institutions have no experience in what is beyond their ivory towers.
    They have implemented a system that take financial advice away from the general public. The IFA industry has been saying this loud and clear for the last 3 or 4 years up and beyond the RDR. No one listened because it did not effect them, The then Treasury financial secretary Mark Hoban and FSA chief executive Hector Sants have a lot to answer for.

  5. “….the FSA or FCA should have foreseen this and put in place measures to ensure lower value clients continued to be served by the advice market. ”

    What and allowed these bent so and so’s at the banks continue to rip off clients and flog them things they didn’t want or ask for? Odd sort of regulation that would be.

  6. The fact that people seeking advice have to pay their own way has meant that there is now less cross subsidy and this would appear to lead to a fear of there being people who ‘can not afford to pay for advice’ – however these people were paying for advice, it’s just that they were oblivious to it. The current debate on annuities is a perfect example of that.

    I have not yet met anyone who can’t afford ot pay for our advice, nor have I found someone where our advice charges do not offer them good value given the services they received – I have, however, met people who do not want to pay for advice.

    I feel that RDR has potentially hit the latter the hardest….

  7. My very great friend in Rome 14th January 2014 at 7:16 pm

    So no admission then that a good deal of the RDR has actually resulted in consumer detriment (higher costs, falling adviser numbers and a growing advice gap) and that the FSA’s tsunami of over-prescriptive regulation has turned out to be detrimental rather than beneficial to the advice process.

    And there was me, mistakenly it seems, thinking that Martin Wheatley might be a better listener than his predecessor and more attuned to WHAT CLIENTS ACTUALLY WANT, which is simple, straightforward and easy to understand recommendations for planning their future finances. Didn’t Martin Wheatley claim that the FCA “is a very different animal from its predecessor”? What he seems to be saying now is that if the FCA had come to power six years ago, it would have been even worse. Oh dear, oh dear.

  8. It would also have been nice to have foreseen the Credit Crunch. However, the Regulators were too busy attacking the small man, ignoring the real abusers.

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