When Pinsent Masons senior associate Michael Ruck interviewed for a job at the FSA almost seven years ago, he never thought he would get it. Having worked as a criminal defence lawyer for small firms until then, joining the regulator in Canary Wharf marked a significant change of direction.
“The FSA was looking to recruit criminal defence solicitors and barristers as part of its credible deterrence strategy,” he says. “I came for an interview, never believing I would get it but thinking I would at least have a nice day out in London.
“When I got the job, joining the FSA was a big culture shock – I came from a firm of about 100 people to an organisation of over 3,000 people.”
After studying law and criminology at the University of Sheffield, Ruck trained at Buckle Mellows Solicitors and did a year of personal injury work, which he says “wasn’t for me”.
In 2002 an opportunity came up to join Kirkpatricks Solicitors as a criminal defence solicitor – which Ruck says he always wanted to do.
“When I decided to be a lawyer, I always pictured myself in a court room in front of a jury,” he says.
At Kirkpatricks and then during a three-year stint at larger firm Metcalfe Copeman and Pettefar Solicitors, Ruck worked on a wide range of cases, including fraud and murder.
“I think you either have the mindset that allows you to do that kind of work or you don’t,” he says. “If you took every case home with you would become a nervous wreck but, of course, there are cases that get to you.”
Ruck says the pressure of being in court was “a great challenge”.
“If the funding for that kind of work was different and certain things slowed down – like 3am phone calls from police stations – then I would still be doing it,” he says.
But it was clear that legal aid funding was only going one way and in March 2008 – just as the financial crisis was taking hold – he joined the FSA.
“As I joined there were teams who had been working for two months solid without barely seeing daylight,” he says.
“It was a very interesting situation to go into and I think the regulator acknowledges there were things they could have done.”
Ruck spent six years in the regulator’s enforcement division, largely dealing with small and medium-sized firms.
He worked on a number of high-profile cases, including the £10.5m misselling fine for Card Protection Plan in November 2012, the censure of death bond firm Catalyst Investment Group in October 2013 and the collapse of Keydata.
He says: “Obviously some lessons were learnt from Keydata, which helped sharpen the Catalyst investigation. But the complexities in co-operating with overseas regulators and working with the Financial Services Compensation Scheme on Catalyst were still huge.”
Ruck says he understands the frustrations among advisers around the collapse of firms like Keydata and Catalyst and the FSCS levies they trigger.
“It must be frustrating for any firm for their levies to be paying for other firms which have done wrong,” he says. “The vast majority of firms are not of that ilk, but there has to be a way of funding redress for consumers.”
Ruck also worked with FSA supervisors in the lead-up to the implementation of the RDR.
He says the regulator did not anticipate the impact the RDR would have on access to advice.
“The regulator’s viewpoint was always that consumers will simply pay a fee instead of commission. But it failed to see this would lead to consumers not being able to afford advice or firms not being willing to offer advice to certain groups.
“The commission model was not perfect but the vast majority of advisers have always given the customer the best product and advice for them and I don’t think that was really understood.”
Ruck says the FCA has not done enough to help firms interpret the RDR rules, which has led to confusion. He says: “When there is a big change in the market, there is always going to be a period of transition, but it is not helped when the regulator does not assist in the interpretation of the rules. The FCA’s guidance on issues like independence seems to confuse the matter further.”
Ruck joined Pinsent Masons in January in the firm’s financial serv-ices enforcement team. He works with firms undergoing enforcement or supervisory action by the FCA, including section 166 reports.
Ruck says he is enjoying working with clients again and challenging the FCA on the way it applies its rules. “The main downside of working for the FCA was seeing it do things you did not agree with, particularly when you thought it was pushing the rules beyond what they were intended for,” he says.
But while the regulator could do more to understand the “commercial realities for regulated firms”, Ruck argues the industry must also show it is learning the lessons of the past. He says: “Too many firms are not learning from regulatory actions, from banks to small advisers who are continuing to advise on inappropriate Sipp transfers despite numerous warnings.”
One of the regulator’s biggest areas of focus at the moment is attestations, says Ruck, where it asks senior individuals to sign confirmation that they are meeting certain requirements, for instance, through a Dear CEO letter.
“Most firms I speak to have had a request for an attestation in the last six months,” he says. “It is a genius idea – the regulator asks the chief executive to sign a piece of paper saying everything is fine, and then six months down the line if something goes wrong they can put that back in front of them.
“The FCA is using them all over the place and I expect we will see an enforcement action in the next six to 12 months as a result.”
2014-present: Senior associate, Pinsent Masons
2008-2013: Advanced associate, FCA [FSA]
2003-2008: Solicitor, Metcalfe Copeman and Pettefar Solicitors
2002-2003: Solicitor, Kirkpatricks Solicitors
1999-2002: Solicitor, Buckle Mellows Solicitors
What is the best bit of advice you’ve received in your career?
Make a list of the pros and cons of any important decision but don’t be afraid to follow your instincts.
What keeps you awake at night?
Apart from my two young children, the level of fines which will be imposed by regulators if the industry does not begin to show signs that it is learning the lessons of previous regulatory action.
What has had the most significant impact on financial advice in the past year?
The recent regulatory changes which have led to those with small amounts to invest, who are often financially inexperienced and the most in need of financial advice, no longer being able to obtain advice.
If I was put in charge of the FCA for a day, I would…
Instigate a programme whereby each FCA employee spends time at the coalface with a financial services firm to gain an understanding of the commercial realities of the environment in which they operate.
Any advice for new advisers?
Apply some common sense to everything you do and if a product, opportunity or customer sounds too good to be true, it probably is.