With hindsight, you would expect the FSA regrets its decision to so swiftly reject the Treasury select committee’s call for the RDR to be delayed by 12 months.
The move has angered members of the committee who have accused the FSA of arrogance and treating the committee with contempt.
TSC chairman Andrew Tyrie last week wrote to FSA chief executive Hector Sants to express his dissatisfaction with the regulator’s behaviour.
Sants responded to assure him the regulator was taking the TSC report seriously.
Whatever the FSA’s motives in sending out an embargoed rejection of the TSC report’s key recommendation to be published alongside the report, it has turned into a huge PR blunder. MPs feel they have suffered from the same kind of behaviour that many IFAs complained about in their evidence to the select committee.
Tyrie has vowed to keep up the pressure over the RDR and Sants may find he is called to explain himself at another TSC evidence session.
In Sants’ response to Tyrie, he said the FSA would soon be publishing guidelines for eligibility for waivers from the RDR as well as considering whether “further mitigating action” is needed to help IFAs meet the RDR deadline.
Whether this is the start of a loosening of the FSA’s dogmatic stance on the RDR or simply Sants paying lip service to the committee we do not yet know.
What is clear is the TSC has strong reservations over the FSA’s evidence for why the RDR should not be delayed and big worries about the potential damage to both the IFA industry and consumers in bulldozing through the RDR to fit in with the regulator’s arbitrary timetable.
It is also clear that Tyrie and his committee of MPs is unlikely to let this matter drop.
Let us hope that Sants is true to his word and that over the next few weeks the FSA does indeed take some time to carefully reflect on the MPs’ recommendations and consider whether a short delay combined with some added flexibility for experienced advisers really does conflict with the admirable aims of driving up professional standards and making charges far more transparent.
Introducing a dose of pragmatism to the RDR’s transitional arrangements, will give the reforms a much greater chance of being a long-term success for consumers and advisers alike.