Since Martin Wheatley took over as chief executive of the regulator we’ve seen a marked improvement in the way the organisation deals with the press.
Wheatley appears to get the enormous benefit of allowing the media decent access to senior staff and the dangers of a slightly paranoid bunker mentality which often drove the regulator’s media relations agenda in the past.
Certainly from our own perspective, we’ve been given good access to Martin Wheatley (compared to zero interviews with Hector Sants) and interviews with senior staff whenever relevant policy announcements are made.
It probably helps that people like Nick Poyntz-Wright, with considerable amounts of private sector experience, are now in senior positions, rather than career regulators whose only experience of the media is getting a good hiding.
However, there is one area where Hector’s old habits appear to die hard and we saw this re-emerge last week with the publication of the latest RDR adviser numbers, laden with PR spin. The FCA is hugely conscious that it is open to criticism from politicians and the consumer press over the effect of the RDR on access to advice and will do whatever it can to position the review as a success.
Take last week’s adviser numbers news. The small and easily explained increase in the number of advisers between the start of the RDR (31 December 2012) and 31 July was sent out to journalists last week as part of a press release hailing the fact that consumers still have plenty of advice options available to them.
However, the regulator was a great deal more reluctant to publish the far more interesting (and relevant) fall in adviser numbers caused by the RDR when they first became available.
After weeks of hassling from our reporter Natalie Holt, the regulator finally gave us the numbers we were looking for at the end of March. We compared these numbers to the best source of FSA research available (estimates of adviser numbers from December 2011), as the regulator does not have actual comparable data.
This showed a 20 per cent fall in IFAs and restricted advisers, compared to their equivalent numbers for December 2011, from 25,616 to 20,453. It also showed a massive but not unexpected 44 per cent fall in bank advisers, from 8,658 to 4,809.
You’d have thought these statistics would be worthy of a pretty big press announcement, outlining the significant effect the new retail policy was having on the market. But no, the only reason the numbers came to light was constant pestering from ourselves.
However, the fact adviser numbers have risen a bit since the start of the RDR was worthy of a formal press announcement from the FCA. This increase was widely expected as more advisers who missed the initial RDR qualification deadline passed their qualifications and returned to the industry.
Unhelpfully, last week’s press guidance from the FCA made no mention of the December 2011 estimates (these were buried in an accompanying research report). Instead it quoted summer 2012 estimates, which obviously lead to a lower fall when you crunch the numbers as they do not take account of the large amount of advisers who left between the two dates.
Despite last week’s spinning, the fall remains pretty dramatic (although not as much as some predicted). Financial adviser numbers have dropped 15 per cent, from 25,616 to 21,684 between December 2011 and July 2013. Bank adviser numbers are down 47 per cent, from 8,658 to 4,604.
Taking a further step back, adviser numbers are down nearly 22 per cent between December 2010 (FSA estimate: 27,651) and 31 July 2013, reflecting the number of advisers who decided to leave the industry early in the run-up to RDR, alongside those retiring naturally.
Another big worry is that these figures appear to have been presented by the regulator as the RDR-end game. There is lots of concern amongst the advice profession that some firms have been so focused on reaching the required qualifications that they have not have spent as much time on transitioning their businesses as they should have done and may struggle to make adviser charging work. Many clients are yet to have their first post-RDR review and to a large extent their sentiment on fees remains unknown.
The 31 December 2012 was never going to be a big bang moment as the effect of the charging changes will only be properly understood in the coming years.
But the frantic spinning shows how worried the FCA is about the way the RDR is playing out in the press, with negative headlines about access to advice overshadowing positive messages about higher qualifications and more transparent charging.
There’s plenty of debate to be had about the initial success or failure of elements of the RDR and additional changes the FCA might look to make over the next couple of years.
How much of any advice gap already existed before the RDR? How many of the advisers who have left the industry just retired a couple of years early and what type of service were many customers really receiving from the near 50 per cent of bank advisers that have left the market?
But any such debate should be informed by decent transparent statistics about what is actually happening on the ground.
The way the regulator has “announced” RDR numbers since the review’s introduction shows there is still far too much nervous spinning taking place as its PR machine looks to influence Westminster and create positive headlines. This is hardly likely to create the right environment for a grown up debate about the success or failure of the biggest regulatory intervention in years.
Paul McMillan is group editor at Money Marketing- follow him on twitter here