On April Fool’s day last week we saw the birth of new tougher regulators, the Financial Conduct Authority, the Prudential Regulation Authority and the lesser known Financial Policy Committee.
These organisations are not full of fools but thousands of keen bright employees trying to hit their targets and improve consumer financial services outcomes.
The FCA is targeted to improve consumer protection, integrity, and to promote competition in the interests of consumers whilst trying to not make it more complex for firms to conduct business. The PRA is trying to ensure there is prudential regulation and the FPC exists to spot risks to the financial system and aims to provide guidance to other regulators.
It is a shame that the FCA is not targeted to help regulated members become more ethical. It truly makes me angry as I pass through many regulated firms in my day to day job of helping financial services firms be successful as I see bins and bags full of disclosure information, business cards and literature that need to be replaced, simply to replace one letter.
Authorised and regulated by the FSA now needs to state authorised and regulated by the FCA. Thousands of pounds worth of perfectly good and compliant printed items thrown in the bin!
I believe the FCA has some good intentions.
It will ban misleading financial promotions and have a dedicated team checking for faulty promotions. The last time I was in the FSA there were 35 dedicated full time employees in the financial promotions team. I do wonder out of 2,848 full time FCA employees, how many work in the FCA financial promotions team in these austere times?
Is not whistle blowing by the industry a more effective way to police financial advertisements, social media and promotions than by funding a large salary bill?
If competition is sought to benefit consumers should we not wish to see more financial advisers covering the whole country not just focusing on the geographical pockets where the wealthy live?
We are led to believe that total number of financial advisers fell from 40,566 pre RDR to 31,132 on the first day of the RDR era.
This is the first time the regulator has published the number of advisers and it admits there might be double counting in the previous year. These are the comments we expect from a chicken farmer not a regulator paid for mainly by financial services companies.
Surely it is not difficult to count regulated members in these days of sophisticated database management?
It is good news that the FCA will count and publish in the future the number of regulated financial advisers for if the numbers drop considerably, it will be time to review regulation again because financial services products are sold and are not bought.
How can a big reduction in financial adviser numbers be good for the 20 million people who need financial planning ranging from debt management to portfolio planning?
For the financial advisers that remain, I agree with APFA that it would be unfair if financial advisers have a 30 per cent increase in regulator fees this year. For after all it’s the regulator that has reduced the number of advisers by over 30 per cent over night because of the RDR.
This hike in fees may well be the last straw even for those who have managed to jump over the RDR hurdle.
Kim North (kim@techandtech) is director of guidetoadvice.co.uk