After GI Day in January, the industry waited for with bated breath for June 1 and the onset of depolarisation.
Some firms readied their multi-tie arms while others scrambled to prepare their payment menu documents. IFAs argued that the FSA had got its sums wrong and had set the market average far too low, making advisers look uncompetitive.
Aifa tried and failed to have depolarisation postponed and even referred the menu to the Office of Fair Trading. But after all the excitement beforehand, D-Day passed with barely a whimper. Perhaps this was because so few people seemed to know what was going on, let alone how many advisers were retaining their independent tag and how many had opted for the whole of market route.
Advisers were also hit by a massive increase in Financial Services Compensation Scheme levies for 2005/06 caused by a surge in endowment and precipice bond misselling claims and compounded by the withdrawal of product provider subsidies.
The introduction of a payment instalment scheme failed to appease the industry which called for a reform of the way the FSCS is funded. But in November the FSCS warned IFAs to brace themselves for yet another big rise next year due to a predicted threefold increase in endowment complaints. IFAs will now pin their hopes on the initial findings of the FSCS review of funding which is due to be published around Christmas.
The Legal & General case, when the financial services and markets tribunal halved the FSAs 1.1m fine, prompted a full-scale review of the regulators enforcement division to make it more transparent and ensure that this would not happen again.
The reforms were welcomed but the damage had been done. Tensions between the industry and the FSA boiled over after the Prime Ministers scathing attack on the regulator during a speech to a policy thinktank.
The watchwords of 2005 were better regulation, ending gold-plating, cutting red tape and lowering costs. The European Commission finally published its white paper on regulatory priorities in December. Much to everyones relief, it pledged to assess the costs of proposals before foisting them on to European Union member states. The FSA also promised to do its bit, announcing the launch of an independent study into the cost of regulation for firms.