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‘Nothing to do with me’: Mark Hoban washes his hands of the RDR

Former Treasury financial secretary Mark Hoban says the RDR was “nothing to do with me” as he called for FCA clarity around online advice rules.

Speaking at an event held by think tank Policy Exchange in Westminster last night Hoban, who was Treasury minister from May 2010 to September 2012, told Money Marketing the RDR was solely the responsibility of the FSA.

In a parliamentary debate on the RDR in October 2010, Hoban backed the RDR by claiming it would increase professionalism and transparency while attracting “fresh talent” to the advice market.

The Conservative MP argued advisers needed higher qualifications, comparing them to McDonald’s staff serving Big Macs.

But asked last night if the RDR rules had damaged savings, he said: “Let me just correct you; the RDR is nothing to do with me, it was the decision of the independent regulator. I know lots of IFAs hoped I would interfere with the regulator but that is not something I would make a practice of.”

Hoban said the rules around online advice need to be clear as there is a “big opportunity” for delivering mass market advice via the internet.

He said: “We need to make sure the regulatory system enables people to have advice models and serve the advice market. That does require regulatory certainty and guidance.

“If you got that then you put together quite a strong advice package and enable people to take control of their plans in retirement.”

Hoban also called for the Government to “focus” more on savers converting their pension pots into retirement income, and warned about the growing status of non-advised annuity brokers.

He said: “There is an issue around advice and distribution at retirement. I looked at the Financial Services Consumer Panel report and it was a powerful indictment of where we are at on non-advised sales and the websites out there. Those websites have mushroomed since reforms were introduced to help people shop around.”

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Comments

There are 29 comments at the moment, we would love to hear your opinion too.

  1. It’s laughable how politicians are quite happy to take responsibility when something goes right – however tenuous their association with it’s creation. Yet when something goes wrong, they wash their hands faster than Pontius Pilate eating a plate of sticky ribs.

    If the RDR had been a huge, unqualified success, do you think for one minute Mark Hoban would have given all the credit to the FSA?

  2. Neil F Liversidge 12th March 2014 at 9:05 am

    Success has a thousand fathers. Failure is an orphan.

  3. Paolo Standerwick 12th March 2014 at 9:08 am

    That’s not what he said to me when I spoke with him on the telephone before the current gvt got into power. I challenged him on this and he stood firmly that bit was a.good thing.

  4. So Mr Hoban washes his hands of the RDR and its destructive consequencies? Now it seems he thinks ordinary folk can ‘go online’ for financial advice. And who adfvises them which would be best of the various web sites for them in their circumstances? Where do they claim compensation if the web site advice turns out to be wrong and clients lose money? Bring back proper face to face Independent Advice which RDR largely destroyed!

  5. Nick Pilkington 12th March 2014 at 9:10 am

    I watched & listened to Mark Hoban on the parliamentary debate on RDR . He appeared to be unable to grasp what it was all about & simply regurgitated the FSA viewpoint.
    It is a bit alarming that people with so little knowledge or understanding of the Financial services market are in a position of influence.

  6. Cant wait for Sants to come out and say the same !

    If its (RDR) been such a roaring success how come they have all ran as far as they can or been pushed to some broom cupboard where they cant do much more harm ?

    Like Smithy above has said; if it had of been such a success would he be giving the FSA all the credit ?

  7. It just goes to show, the people who thought up the RDR, just had very little, if not, no idea of Financial Services, the culprits have all disappeared and have washed their hands off ever being part of this utter travesty!

  8. “We need to make sure the regulatory system enables people to have advice models and serve the advice market. That does require regulatory certainty and guidance.”

    Wise words and the only ones that matter in this article. Unfortunately the fix requires a radical reform in the way the suitability rules are written. The rules need to be clear and immutable, constantly issuing guidance that effectively changes the rules as they are understood is damaging, feeds distrust and damages innovation (including on line advice).

    Add in an Ombudsman that can effectively write their own precedents and you engender a culture that looks back not forward.

  9. No one in government or FSA had any idea what the outcome of the RDR would be. They all get pensions paid for them, they probably have access to advice from top CA firms unlike the man in the street who needs advice but on average now cannot afford to pay up front. What was wrong with commission being paid and a client actually paying for it over a period of time. Hoban had no idea what RDR stood for but took credit at first and now blames the FSA .What a man!!!

  10. “and on the fourth day God made all creeping things”

  11. I met with Hoban shortly before his elevation to Treasury Secretary and he supported the RDR stating that it would increase consumer confidence,.

    His subsequent antics – ignoring the concerns of fellow MPs, appearing totally disinterested to their entreaties and then repeating the FSA mantra at every occasion – shows how his latest spoutings are nonsensical and also indicates why Cameron felt his continued presence at the Treasury to be pointless.

  12. Unbelievable arrogance. It was Mark Hoban who refused to listen to ANY comments received from the IFA community. It was Mark Hoban who set himself up as the protector of the people. His selective memory of his role in the RDR debate is breathtaking!

  13. goodness gracious 12th March 2014 at 10:06 am

    what concerns me is the assumption that on-line advice can be in any way good advice. Research, tailoring need to risk to product is complex and starts with the right questions being asked and answers verified, narrowed down and placed in order of importance. Have you had a new client come in and say ‘I have 30k to invest, medium risk, for 5 years plus, what investments do you recommend? Only if it was a mystery shopper. My first question would be: how did you come to that conclusion? Tell me more!
    Can a computer programme do this? Can a programme look at all factors and existing investments? If most risk programmes out there are often wrong in their conclusions and risk is a measure of past returns, with volatility, measured by arbitrary value judgements promoted by other programme providers, and has limited relevance for the future, how will on line advice work? Can it review or does it provide a flog and forget solution? Is this just a play by big corporations, who failed to provide fair and comprehensive advice to their customers via a human interface, trying to find another way to extract more from customers back pockets without getting the blame. Danny, why could you not have thought things through when promoting RDR.

  14. Nicole Barnfield 12th March 2014 at 10:18 am

    The McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. With McDonald’s, you can harness the power of both global and local innovations to drive your business’ growth. Most fast food chains have such items, if you only know to ask for them.

  15. “not my circus, not my monkeys”

    Polish proverb

  16. Mr Tired at 9.20, the people that thought up the RDR knew exactly what they were doing. The whole point of the City of London is to extract money from the masses, (poor people), to make the very rich even richer. The RDR has strengthened this aim. The very rich have far more protection than they ever did, they have better qualified advisers and they can now pay them less. The poor on the other hand are being corralled into higher charging products and funds through direct offerings. The ones that cannot invest are catered for also in the lending world as they pay many hundreds of times more for borrowing money than the better off. The true purpose to make the rich richer, job done, a success.

  17. Money Advice Service – paid for by the industry and set up by the FSA/FCA.

    And yet the advert states that it was set up by government.

    You have got to love politicians – not!

  18. During the years run up to the RDR I lobbied my local Labour MP with all the information on what I regarded as wrong within the RDR. Especially the focusing on “How the masses will pay or be able to pay for good sound financial advice” It fell on deaf ears on a person who like many/most MP’s who dont give a monkeys on what was inevitable. It could have been that my MP just did not understand what was happening and the effects of the changes . It seems that he picks up his £60K + expenses for doing nothing like many others at Westminster.
    All MPs should be university qualified with a degree in politics and have served at least 10 years in industry to gain life experience.
    And for Hoban, he is a waste of space.

  19. @Smithy0364
    Of course you are right. But that is why the Regulator was invented the way it is, in the first place. It is supposed to be independent of Government (which it plainly is not when it comes to major policy).
    But when things go right then the Government takes the credit and when they go wrong the Regulator gets blamed, gets hauled in front of the TSC and we have the charade ending in the Regulator just ignoring any culpability or transgression.

    Who but a politician like Mr Brown could have thought that up?

    As far as Mr Hoban is concerned he is behaving as nothing more or less than a politician, and we all know how much they are respected.

  20. Terence O'Halloran 12th March 2014 at 11:48 am

    You would not trust these people to put your wheelie bin out. I wrote to Hoban on a number of occasions. The man would not know the truth if it stared him in the face. ” …..pants on fire”
    Terence P

  21. Mr Hoban, along with his insipid sidekick David Gauke, are the reasons why I will not vote Conservative again. He can distort the truth as much as he likes but I am not going to support this any longer. I realise withdrawing my vote is not much – but if enough people did it………………….

  22. David Gaulke is my constituency MP and is the proverbial chocolate teapot.

    I asked him, as a constituent, to fight for reconsideration of the RDR and he assured me that he would never go against the party line.

  23. If IFAs cannot have a long-stop in respect of their actions EVER, how come snollygoster MPs can simply wash their hands of every disaster they cause. Not good enough Mr Hoban.

  24. Mark Hoban MP controled the exit switch for thousands IFAs who would remain bank competitors if allowed to stay in practice post RDR. In spite of this he took advice from the RDR implementation committee, a string of bankers, advisers to bankers and former FSA officials. His nine strong team includes:

    Michael Foot, former FSA managing director;

    Carol Sergeant, chief risk director at Lloyds Banking Group; and

    Nick Prettejohn, former Prudential UK chief executive.

    Davide Taliente, partner at Oliver Wyman,

    Simon McGuire, former vice chairman of UBS’s investment banking division,

    Jonathan Herbert, former head of European law at the FSA

    Amanda Harvie former chief executive of Scottish Financial Enterprise,

    Teresa Perchard, director of public policy for Citizens Advice; and

    John Tattersall former chairman of financial services regulatory practice at PwC.

    NB: Foot, Sergeant and Herbert are all ex FSA, Tattershall is the former boss at PWC when Hoban and Chris Cummings were both there, Sergent, Taliente and McGuire either bankers or advise bankers.

    This is a small club and guess who’s not in it – the IFA! The sum total of this groups reads to me like a pro RDR, FSA and banking club and now Hoban claims he was not even the host of this party!

  25. What is the point of the process of having a democratically elected parliament if MPs see it as their job to delegate policy to unelected bureaucrats.

    By nature a regulator is process led and does not consider social or economic consequences. They by nature want monopolies, fewer participants. Lord A Turner is today calling for just that, a national collective, its easier from a process led mind to regulate.

    Just why would someone work to become an MP, then internally campaign for high office but not want anything to do with policy?

    Lord Turner ex regulator skips over the fact that competition has delivered cheaper and more efficient auto enrolment propositions than NEST. He bypasses the economic consequences of the 10’s thousands employed in the pensions industry and the expertise in areas like fund management that help London deliver 20% of the Treasury’s income. What are MPs for?

  26. In addition Lord Turner being process led, puts maximum importance to charges when we know the biggest impact is fund growth. Knocking 0.25% of the AMC but getting 1% pa less in growth is not good policy.

    This is already affecting the choice of funds going into default funds in anticipation of it. The better funds with better statistics, sharpe ratio etc and are being ruled out.

  27. McHoban’s description of the FSA/FCA as being independent [of government] is patently false. It’s not and nor was it ever. In fact, a quick check of its website reveals that even the FCA no longer makes this brazenly phoney claim. It’s a branch of government funded by those over whom it holds unaccountable sway.

    For example, the FSA had to obtain Parliamentary approval for its RDR. If it’s independent ~ why? Given what’s at stake and the powers vested in the FSA/FCA, how can it possibly be independent of government?

    And then, having obtained approval for its RDR, the FSA embellished it endlessly because no one thought to say: And by the way, if you want to make any changes to what’s been approved today, you’ll need to come back and seek permission for those proposals to be added. But no such caveat was articulated, so the FSA granted itself free rein to create something a framework that, as we’ve seen, has gone vastly beyond that which was originally approved and, quite simply, there was nobody to stop it. In fact, no body exists to put the brakes on the regulator basically doing whatever it likes.

    So now we have an advice gap about which Martin Wheatley admits to being vaguely concerned, Clive Adamson is in denial and Adair Turner, with a casual shrug of his shoulders, declares to have been “inevitable” ~ so that makes it okay, then, does it? With the banks having largely withdrawn from attempting to provide “advice”, sure there are more people turning instead to independent intermediaries. But that doesn’t mean that anything other than more people of relatively modest means haven’t been disenfranchised from obtaining quality advice. They simply can’t or won’t pay for it.

    Mendacity in politics remains very much alive and well, perhaps no more so than in the field of regulation.

  28. @Jon | 12 March 2014 6:14 pm

    We know the FSA is not accountable to Treasury Ministers or to Parliament, as confirmed by Hector Sants at a Treasury Select Committee meeting on 9 March 2011. In constitutional law the executive is the part of government but separate with responsibility for the administration of the state, in our case the regulation of the state and its financial services.

    The government claims the FCA is independent because they have an eye to preserving the myth of the “separation of powers. You see the executive FCA is not supposed to make laws (the role of the legislature) or interpret them (the role of the judiciary). The role of the executive is to enforce the law as written by the legislature and for its actions to be adjudicated upon by the judicial system. We all know this is not the case in financial services because it suits whatever government to bypass the democratic and judicial system. The FCA is therefore an abuse of power in a democratic system and as such a danger to us all.

  29. Looking ahead and stealing the idea from Nick Bamford (I’m not a politician so happy not to take the credit) is it time for the concept of IFA’s to be regulated by the professional bodies rather than the FCA to be taken seriously? Let the FCA concentrate on the restricted and product selling businesses.

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