Last week, at midnight on Friday November 30, the world's most powerful financial watchdog finally took on new powers over everything from inv-estment banks to friendly societies. The FSA is, no doubt, relieved that four years of preparation are over and the change means we undergo our biggest regulatory change since 1986's Big Bang.
This is very significant for all of us with responsibilities for the delivery of financial services, as it marks a step-change in regulation. The FSA intends to hold individuals as well as organisations responsible for complying (or not) with its rules.
It has significant powers to discipline, disqualify or fine individuals where they fail to meet regulatory/ethical standards. It intends to bring together accountability (which cannot be delegated) and res-ponsibility and significantly increase the potential personal liability for each of us involved in financial services.
From December 1, the regulator plans to carry out its job very differently, concentrating on the risk that a company might give unsuitable advice and sell inappropriate products rather than just checking that the rules are followed. The FSA says its new approach will allow it to be a “light touch” regulator, leaving the best-run companies alone to get on with the business of making money.
Misys will be one of the best-run companies and this has involved us investing millions of pounds in the last eight months alone on further imp-rovements of service to member firms. What is the total cost to the industry of these chan-ges, as I hope that all other companies have taken N2 as seriously as we have?
But the role of the adviser must still focus on consumer needs and new, increasingly complex areas of advice. The at-retirement market is growing at a significant rate and represents a great opportunity for IFAs. The increasing need for regular monitoring of drawdown accounts and unit-linked or with-profits annuities places clients in greater need of someone they can trust to advise on the investment issues from the broadest perspective without bias or favour for what may prove to be the rest of their life.
There is arguably no one better placed than an IFA to fulfil this role. In return advisers will benefit from greater security of income and substantial increases in the value of their business.
All this, of course, is dependent on advisers having the appropriate skills and keeping them up to date. The range of options available is increasing. In the past few months, working with seven of the leading providers in the market, Misys has put together a course aimed at improving the confidence of advisers, raising awareness of the technical issues and helping them with study towards the K10 and K20 exams.
We are rolling this out across the country and what has struck me is the enthusiastic response from our members. More than 500 advisers have registered to attend and faxes are still coming in at a phenomenal rate.
This would be remarkable on its own but whenever training programmes are considered we see increasing enthusiasm from IFAs across the spectrum to identify and develop expertise in niches that will prove to be very profitable in the long run.
In recent months, providers have offered detailed training on trusts, long-term care, business protection, offshore inv-estment and portfolio construction and the response has been encouraging, whether you look at it from a client's perspective (better quality advice) or a business perspective. Next year will prove very busy.
Andrew Bedford is director of marketing at Misys IFA Services