View more on these topics

Rob Reid: FCA cannot ignore its ‘too-difficult’ pile anymore

As time goes on, it becomes increasingly clear the regulator is building a very significant “too-difficult” pile. Quite apart from the health and safety issue this creates, my main concern is that it is not at all helpful to the public at large. Nor is it helpful to advisers, irrespective of their type or proficiency.

As more and more opaque and complicated products seem to appear, there is an even greater need for the FCA to determine what should be marketed to the public and what should not. This, of course, leads on to the debate as to what a professional investor is, which, depending on whose website you look at, is greatly variable.

The regulator was recently asked whether it would consider a ban on unregulated or non-standard investments from Sipps. It responded by stating that effective due diligence checks by Sipp operators were a more proportionate way of protecting consumers than an outright ban. This is a response devoid of merit at any level. Pushing the problem on to someone else does not always solve it. But, then again, this is something the FCA has a track record with.

Claire Phillips: Outdated FCA risk guidance misses vital behavioural element

So there needs to be greater lateral thought in what is regulated and what is not. With several employee benefit consultants getting ready to promote collective defined contribution schemes in a way that could see them billed as “DB lite”, the need to provide advice – collective or otherwise – to members and the regulation of those firms become even more appropriate.

This could be in the form of better and stronger disclosure rules for occupational schemes which, to be fair, the Department for Work and Pensions is beginning a process of consultation for. At the same time, we need both the FCA and The Pensions Regulator working in tandem to develop a strategy as to how the marketing of these CDC schemes is going to be policed.

At the moment, employee benefit consultants are largely unregulated. Some may state they are regulated via an approved professional body status through the Institute and Faculty of Actuaries, but this is not the same as the regulation being applied in retail financial advice – either in terms of strength, supervisory depth or enforcement. Nor do the firms under APF status pay anything towards the Financial Services Compensation Scheme.

John Lawson: DC or CDC? That is the question

We need to ensure the regulation delivers for the consumer. After all, that is a key requirement of its function. It is not good enough to suggest things are too difficult.

If things are too difficult to regulate, I would argue they are too difficult for people to understand – ergo, they should not be marketed.

So whether it is complex investments or CDC schemes, the public deserves something that is fair, clear and not misleading. Passing the buck is not a viable long-term option for regulators.

Rob Reid is principal of CanScot Solutions


Unilever bows to fund manager pressure to stay in the UK

Unilever has abandoned controversial plans to move its headquarters overseas after pressure from household names in the fund management industry. Columbia Threadneedle, Schroders , Legal & General, M&G, Aviva Investors, Lindsell Train and Brewin Dolphin were just some of the major shareholders to have lined up against the proposals, which were due to be voted […]


RBS considers name change after decade of struggles

The Royal Bank of Scotland may look to rebrand after continued reputational damage stemming from a difficult decade since the Global Financial Crisis, according to the Times. RBS chair Howard Davies told the Times the name of the bank is now under review as it looks to move focus away to investing in its other […]

Delivering advice and guidance in the workplace

Three advisers share their ideas and experiences of helping employees with their financial decisions The workplace is instrumental in engaging people to save for retirement. How are advisers helping employers provide advice or guidance to their employees? Telephone guidance Financial education provider and advice firm Wealth at Work recently launched a telephone guidance service to […]


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. Excellent article which highlights several important points.

    The FCA are unlikely to address the issues you raise because it means accepting responsibility and covering their own backsides is more important than getting it wrong occasionally abut protecting consumers.

    Is it so difficult to bring in a regime that protects 95% of consumers by restricting investment to ‘vanilla’ products? Anyone who wants access to anything else would need to meet certain criteria (e.g. a strict definition of professional client) and sign a standard disclaimer.

    • It is not within the FCA’s powers to restrict investing off-piste via a SIPP because the range of investments available is defined by statute. However, what it could do, but seems oddly reluctant to, is create a special permissions regime (with appropriate PII cover) for those wishing to advise on off-piste investments.

      That aside, I recall the FCA’s dismally feeble excuse for having failed to tackle phoenixing is that it’s too difficult. For gawd’s sake, how difficult can it be to undertake a bit of DD into the background of anyone applying for authorisation? Folded your last FA practice? Why? What liabilities have you left behind to be dumped on everyone else by way of the FSCS? It’s not rocket science.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm