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.”