View more on these topics

‘FSA crisis failure has killed off UK influence’

The FSA’s handling of the financial crisis has undermined the UK’s reputation in Europe, according to Lansons Communications director Richard Hobbs.

Speaking at an RDR event held by PananceaIFA in London, Hobbs said: “There is no doubt the way the FSA handled the crisis in the UK has greatly diminished the UK’s influence – the Anglo-Saxon model of regulation is dead.”

He said the Government’s proposals for a functional split in the new regulatory architecture is at odds with the sectoral approach taken by the EU and is likely to disadvantage the UK in future. He said: “The Government has shot the regulator in the foot. We are mismatched and will be disadvantaged further by that.”

Hobbs also said that European regulation on packaged retail investment products will not interfere with the RDR because it is focused on disclosure. He said the Prips plans being consulted on by the European Commission are looking at the “old technology” of disclosure.

He said: “Prips will not affect the RDR because Prips have already been sub-divided into the insurance mediation directive two and markets in financial instruments directive two and will major on, although it is old technology, going down the disclosure route.”

The EC’s consultation paper, released in November includes proposals to use current and future revisions in the investment services directive and Mifid to impose strict pre-contractual disclosure rules on intermediaries including, where necessary under Mifid, on the handling of incentives.

It stops short of rules on how fee structures or performance are disclosed, saying more work is required.

When the Prips consultation was released, Aifa director of policy Andrew Strange warned that full disclosure in key investor information documents could conflict with the RDR.

He said: “This would be, at best, incredibly complex with the varying models and methods of charging for financial advice. It would also be unclear how an adviser would be able to offer advice on a product where a provider cannot accommodate an adviser charge or fee within the document.”

Recommended

Brokers back bank rate alert

Mortgage brokers have welcomed the Bank of England’s warning to homeowners that it is looking to raise bank interest rates to 5 per cent. BoE executive director of markets Paul Fisher, who is a member of the bank’s monetary policy committee, said BoE policymakers would like to raise rates to around 5 per cent as […]

11

Click closes GI business after payment row

Non-advised protection firm Click has shut its general insurance business, resulting in 80 job losses, with GI staff getting no pay or commission for December. The GI arm, which sold home insurance from the company’s Northwich office in Cheshire, was closed down on December 22. Click says it took the decision to close the business […]

1

Just Retirement appoints three new directors

Just Retirement has appointed three senior executives as it looks to ramp up its distribution capabilities and product range. Former Living Time marketing director Steve Lowe becomes director of external affairs focusing on public relations, public policy, industry co-ordination and knowledge leadership. Mark Hawthorne joins the life assurance group as commercial director from Alico, where […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Regulators are like buses, there will be another one along soon, all brand spanking new and ‘improved’.

  2. You missed out some fundamental issues Richard, it appears that you are not alone if that is any consolation.

  3. It strikes me that regulating products, and compelling full disclosure, is a more practical method of developing a better financial services industry than trying to change human behaviour overnight, which is pretty much what the FSA are attempting.
    Full product and cost disclosure will be a small step forward (which has already been in place for 20 years, allegedly); better qualifications will be another step forward. But the biggest step forward would be to persuade the Adviser Sector to participate fully in the forward march, rather than frog marching them to the precipice. Most dictators that have forced their views on any populace have eventually been overthrown, and quite often that has also meant throwing out the baby and the bath water.
    Peer pressure is the most effective motivator of all. The incidence of drink driving did not decline until society decided that it was unacceptable to keep killing and maiming people in that way. The social pressure on smoking has cause a significant decline, but there is still a large section who are not convinced of any antisocial aspect, so there is still a sizeable smoking minority. Only a small minority consider alcohol to be a problem, so there is no peer pressure to curb “binge drinking”. Indeed so badly has that part been handle and so pathetic is the definition that it has almost become a badge of honour to “binge drink”. And progress is slight.
    Have the FSA learnt anything about managing human psychology from those, and many other examples. I think it is safe to say that part of their brain remains virginal.
    So start by improving the disclosure and qualifications regulations. And, more importantly, remind people of the benefits of good advice rather than telling everyone at every opportunity that the sector is a mess. If Advisers believe the industry to be rotten, were is the incentive to improve? Why should I spend my time in study and improvement if everyone else is living the high life ripping-off clients? If the positive aspects are emphasised then advisers will feel the pressure to conform; I had better improve to stay inline with my colleagues, or I will lose my client base. Simple concepts, easy and cheap to implement. Read the research – it is all there.

Leave a comment

Close

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

Email: customerservices@moneymarketing.com