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MM Leader: Sants was a symbol of FSA’s refusal to listen

FSA chief executive Hector Sants’ decision to quit the regulator will see him join the steady stream of senior staff to leave in recent times.

Sants, who was an investment banker and previously FSA managing director of wholesale, endured a rocky relationship with the IFA community who saw him leading a regulator all too ready to crack down on the independent sector, yet more reluctant to tackle the advice abuses on display at the big banks.

This was typified by the FSA’s refusal to personally punish senior bank staff for the various advice failings exposed in recent years, in contrast to the treatment of senior management at IFA firms such as Park Row.

In response to accusations the FSA had engaged in light-touch regulation in the lead-up to the financial crisis, Sants crafted his notorious “be very afraid” speech in 2009.

This was followed by a number of welcome personal attacks on bank advice which it was hoped would herald a significant clampdown on the sector. But there remain concerns a high-pressured, anti-consumer sales culture will continue well after the RDR increases the standards required of professional advisers.

Another symbolic episode in Sants’ tenure was the decision to reject the Treasury select committee’s call for a delay to the RDR in a press release timed to accompany the TSC’s report. The move angered MPs and painted an all too familiar picture of a regulator willing to formally consult but unwilling to listen.

Regulatory costs, which are ultimately paid for by clients, have soared and there has been no sense that the age of austerity being felt within Government departments and across the nation has had an impact on FSA spending. In particular, the lack of urgency over the current broken model of Financial Services Compensation Scheme funding has been far from impressive.

In shaping retail policy, there has been an overriding failure to recognise the social dangers of consumers not engaging in financial services, for example, on protection and regular saving, alongside the need to stop bad behaviour.

New Financial Conduct Authority head Martin Wheatley has not been shy in stamping his style on retail policy in a number of recent speeches. He would do well to remember part of his role of protecting consumers should be to ensure a healthy, professional advice sector is allowed to flourish.

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. P…….P……….I………..?

  2. they go easy on the banks because that’s where they go to work when they want to move on. What IFA could afford they salaries they are used to ????????

  3. Derek Bradley ceo PanaceaIFA.com 22nd March 2012 at 1:15 pm

    A very well crafted observation.

    And what next for Hector? After all, the cynics out there were correct in thinking that a big job would be lined up after the summer holidays with a bank or other financial institution for Ms Cole.

    But, with so many high profile FSA ‘ex-ecutives’ having already pioneered this route is there something rotten about such journey?

    After all we should note that Government ministers are prohibited from working with companies their department may have had a relationship with for two years.
    The Advisory Committee on Business Appointments (Acoba), which looks at the position of all ministers who take up jobs after leaving Parliament states that:

    “Under the Ministerial Code former Ministers who want to take up any appointments or employment for two years after leaving office are required to seek advice from the Advisory Committee, and must abide by that advice. Former Ministers are asked to complete an application form”.

    This protocol should apply to ALL those in high profile regulatory positions too and this should be a high priority for HM Treasury to put in place rules to stop such “bed hopping” that has the potential for a commercial organisation to benefit from the possibly highly sensitive knowledge and intelligence that in this case Hector Sants has no doubt been privy to.

  4. Another snake escapes into the long grass, Whatever happened to accountability?

  5. the more I think about this the more I think he has been asked to go….this is the governments and FSA’s opportunity to get on side of the advisory community….

    ‘we are all in this together….’

  6. It is a real shame that the regulator does not ‘engage’ more with the adviser community as opposed to trample all over them with their arrogant ‘we know all’ attitude. 99% of the adviser community are good people who want the best for their clients and realise that a prosperous long term future relies heavily on the client / consumer having a ‘good outcome’ – there I said it! Well let’s face it most of us were doing it long before they dreamt up the phrase (at great expense).

    For many years now the current system of regulation has shown to be largely a failure on virtually all counts; the consumer is no better off, the savings / pension / protection gap is larger than ever and not just because people’s incomes are squeezed. Their confidence has been shaken, partly by the industry itself (a heavily regulated industry) but the contribution of regulatory ineptitude and dogmatic, politcised governmental meddling (of all colours) has been a very significant factor. It has got to the point where even the adviser is unsure of their status at times so who the consumer off the street thinks they are dealing with, heaven knows.

    The new regulatory regime looks to be no different and offer the consumer no let up in the cost they ultimately bear or improvement in their lot, in fact both are set to worsen. Those who regulate and govern seem to decide what the problems are for themselves, often based on the most spurious data or research and most certainly not based on experience of either advising the consumer or being the consumer advised. I am afraid lip service to some ‘focus group’ or ‘survey’ where the questions are loaded to back up a pre-conceived notion does not cut the mustard. Sorry, I forgot Steve Webb’s mother had always received good advice from her bank – 1) What would he know?, 2) I guess if so even they could find no reason to flog her some single premium PPI or a 7% bond over a 3% ISA or some tied term assurance at 50% higher premium than available through an IFA.

    I am not after Hector’s job (mind you I wouldn’t object to his expense account or pension if I had to) but some grown up, meaningful and respectful dialogue and interaction with the people who advise the consumer – and who are consumers themselves – would probably achieve a better and more cost effective ‘outcome’. Simply carrying on as before under a different name with a few different faces will not do anyone (apart from those faces) any good whatsoever.

    Pigs might fly…………..

  7. All the comments are laudable, but does anyone other than advisers read them. I was shocked on the day Sants announced his retirement that more was not made of it in the general press or in the financial sections of the media. Really, people are unaware of the implications of the RDR & MMR on their financial well being and consummer organisations such as Which, moneybox & Watch dog etc. are allowing it to pass by unchallenged. Do they not realise that their target group are /have been thrown to the dogs? Do they not realise that our constant comparision of products is policing the providers and maintaining good value for clients? When we are gone then all is lost!

  8. His CV should have the word FAILURE highlighted very boldly to describe his tenure at the FSA!

  9. Sants is a symbol of everything that is wrong with this country.

    Good riddance and may Turner and the rest of his grasping cronnies follow him.

  10. Goodbye Sants, Hello Mr/Ms/Mrs Inadequate ?

    Nothing really changes does it?

  11. It has been blatantly obvious for many years that the Government and the FSA want rid of IFA’s as we are too expensive to monitor. This was confirmed to me by a member of the Treasury during a conversation at a New Years party (yes he had had 1 too many) in 2009. The EU are pushing to close us all down hence the reason I have deterred my son from joining the industry. IFA’s do exist in the EU but not the quantity as in the UK. The Banks give most of the financial advise and that is what the EU want the UK to do too.

  12. “Still they come up to me, with another name but same old face, I can see the connection with another time and another place.”
    Wasted Life – Stiff Little Fingers

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