Aifa chairman John Gummer has accused the FSA of trying to “regulate by speech”.
In an address at Aifa’s annual dinner last Thursday, Gummer said the retail distribution review should focus on all distribution channels, including banks, direct offerings and non-advised companies “that seem to want to serve their own interests before that of the consumer”.
He said the review should not be anti-IFA or a way to eradicate commission and added that pension reform presents a huge opportunity for IFAs.
Gummer said: “It is not for the regulator to determine the shape of the market. It should be helping participants to look after their customers better.” The regulator must be fair to all parties, he said, citing recent FSA statistics on financial promotions revealing that although 5 per cent of IFA firms are not meeting guidelines on financial promotions, 10 per cent of lenders are breaching the guidelines.
Gummer said that the FSA has delivered its message through various high-profile speeches, with the drawn-out process involving a discussion paper followed by a consultation paper and a policy statement.
He said: “This regulation via speech presents a danger because it does not allow for constructive debate. What we have got is the best possible system they could have given us. What happens though is that you get the regulator giving a speech, then the industry has to give a speech and what you end up with is no dialogue but a war of words.
“If we do not find consent drawn through a consultative process then the regulator and industry risks losing the confidence of its audience – the intermediaries and the end-consumer.”