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FSA should be sticking to its own business

As N2 dawns this week, the financial services industry will be breathing a sigh not of relief but of resignation. Four years on, the jury is still out on the regulator.

On the credit side, it has improved the way it investigates advisers. It wants to simplify the disclosure regime so consu-mers understand it and is making sugges-tions on simplification and standardisation of qualifications which make sense. With the Baird report on its handling of Equit-able, it has finally adopted the high stan-dards of openess it expects from others.

But the debit side makes grim reading. The list includes the Independent Insur-ance and Equitable debacles. The plans for mortgage regulation are unworkable and will drive thousands of intermediaries from the market, probably regardless of quality.

The league tables ignore past perform-ance, in effect denying that active fund management adds anything of value while powers to make senior directors personally responsible threaten entrepreneurial spirit.

The depolarising of stakeholder proved the Government can steamroller the FSA while the Sandler review is a blow to its independence.

But the greatest threat to the FSA comes from within, as it aims to replicate advice. League tables, decision trees and the wish to do an online fact-find add up to advice, even when masquerading as education as cover. Exams, qualifications, disclosure and supervision are the FSA&#39s business. It should concentrate on getting these right and leave advising to others.

A mass of complaints about flawed FSA advice may be more than the regulator, even with its new stable legal basis, can take.

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