Speaking at a Money Marketing RDR and new blood round table last week, Cummings also accused the FSA of breaking its social contract with advisers by imposing new rules that will force many to leave the industry.
He said: “I am particularly worried about a regulator that feels it can break the social contract between the regulator and the regulated by saying ‘today you’re ok, in the future, we will put you out of business’. It is like a Government that says we will lock up people in future for a range of offences that we are not going to tell them about.
“I am also exceptionally worried that the FSA put forward RDR and capital adequacy proposals before ensuring that an impact analysis had been completed.”
Writing in this week’s Money Marketing, Skandia chief development officer Peter Mann branded the FSA’s proposed capital adequacy increases as “nonsense”. He says it is inconsistent for the FSA to say it did not want to hurt banks during this difficult economic period yet at the same time impose such measures on advisers.
Cummings said the FSA has chosen to review adequacy requirements at the worst possible time for advisers. “The prudential paper is one of the most arrogant papers from the regulator,” he said.
Sesame executive chairman Ivan Martin said: “Fourteen years is a long time not to have a capital adequacy review and if it had happened three or four years ago in better times, it may have gone through without a blink but I think that we should park it for a time. The timing of this review is clumsy at best.”