The last 20 years has seen plenty of regulatory change. Each initiative has expanded the influence, cost and invasiveness of regulators without any demonstrable increase in the protection of consumers.
With the number of consumers seeking advice dropping from 23 million to 8 million since the RDR, the Government has tried (and failed) to fill the gap. The FCA now seeks to redefine advice to encourage the larger players to return to the market. But consumers receiving “guidance” will probably have to accept less regulatory protection.
The Financial Ombudsman Service has evolved from a process mirroring civil law to an autonomous system, acting in any way it sees fit. The current system is compromising both inward investment and professional indemnity insurance on which advisers depend.
From arbitrary decisions to a “one-size-fits-all” approach, there is little doubt the regulators are very firmly at the heart of everything wrong with the system today.
So what are we going to do about it?
It is time those that represent advisers stopped reacting to the initiatives of others and began formulating their own proposals. Advisers and their clients require a change in the current regime and knee-jerk reactions to regulatory decisions is no longer acceptable. By the time we have told them it is wrong, it is too late.
Which is why we have begun drafting a “new deal” for advisers. It is a manifesto that will propose workable solutions for the profession; solutions that will meet the requirements of advisers and clients.
We will consult with our membership, industry representatives, regulators and the Government to come up with a set of proposals that meet the standards required, at a cost that is acceptable to all concerned.
The new deal will provide a framework to take the industry forward and serve as a blueprint for the future.
Garry Heath is director general at Libertatem