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Pru deputy chief Barry O’Dwyer slams FSA in email to staff

Prudential UK & Europe deputy chief executive Barry O’Dwyer has written to 2,000 staff slamming the FSA’s approach to policy-making, including its stance on legacy commission post-RDR.

In an email, seen by The Sunday Telegraph, O’Dwyer says while the FSA’s new legacy rules are “not perfect”, some of the proposals the regulator put forward during the consultation would have been “horrendous for customers” and Prudential fought against “some of their more ludicrous suggestions”.

O’Dwyer also criticises the FSA’s Financial Services Consumer Panel, saying it has too much power over new regulation and mentioning the regulator’s new guidance on with-profits funds as an example.

He says: “It became clear to me how much the personal prejudices of some key individuals can determine the direction of regulation. As with the treatment of legacy products on RDR, evidence sometimes seems to be over-ridden by prejudice.”

O’Dwyer goes on to say that Prudential will ramp up its lobbying efforts over legislation it deems to be “ill-judged”.

O’Dwyer adds he is meeting with Alex Salmond in Edinbugh this week to discuss the implications of Scottish independence and how it would affect Prudential’s regulation.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. So whats new? the FSA have been acting like idiots for years.
    They have never listend to common sense and seem set to destroy anything that isn’t a bank!

  2. Derek Bradley ceo PanaceaIFA.com 26th March 2012 at 9:17 am

    Well done Barry O’Dwyer. I think for many within the industry it has become clear that some of the more pernicious aspects of regulation have been born out of personal prejudice.

    The same accusation could be levelled at some politicians too.

    This position does not lead to harmony or indeed better outcomes for customers as in so many ways the outcome that is best for the consumer is the very one that regulation has done it’s best to avoid either by design or default.

    With 279 days to go until MMCDD ( Mass Market Consumer Detriment Day) there is little time to correct the oh so many unintended consequences of poorly thought out regulatory change that will detrimentally impact the Consumer.

  3. You are a brave man Barry, expect a visit from the FSA, very soon!

  4. I’ve never understood why large companies like the Pru, Aviva, L&G, Friends Life and Standard Life have rolled over to have their collective tummies tickled whilst the FSA methodically destroy their distribution. Together they had the strength to oppose the FSA but they did nothing and now their most cost effective distribution channel is about to be decimated.

    My prediction is that at least two of the companies listed above will cease to exist within the next five years.

    O’Dwyers words are all correct but are a little empty coming after six years of nothing.

  5. Yes you are a brave man Barry, expect a visit from the FSA.

    But it won`t be the MD, as going to work with the very people who signed off our banks accounts!

    Remember code of ethics

  6. If these spineless wonders who run our Life and Investment firms and networks had got together initially when this nonsense was conceived and stood up to the FSA at the very beginning, we would not be in this position and RDR would have gone the way of the Dodo.

    I have said from the inception of this nonsense that if all CEOs of networks and Life and Investment firms had stood up en masse to the regulator and said NO we are not going to do this, our IFA sector would not now be faced with being marginalised and taken out of the loop of consumer advice.

    Strange thing is, while these numpties are destroying our sector, (an intended consequence) our fees are being used to fund the expensive folly known as the Money Advice Service, provided by Government (Eh!) Free (Eh!) we pay for this nonsense.

    Too little, too late, too uncoordinated between providers who will soon feel the pinch of lower business levels, less support from IFAs and consequently lower profits.

    Numpties is too kind a word to use when you think of how these people have let us down.

    FSA Rule number 1 – Divide and Conquer
    FSA Rule number 2 – Ignore sensible avdice or representations from the industry
    FSA Rule number 3 – When the manure hits the fan, bail out, get a highly paid job with accountancy or banking firms.
    FSA Rule number 4 – When criticised hold up your hands and say it wasn’t me it was them (meaning anyone not currently employed by the regulator in positions of authority.
    FSA Rule number 5 – If in doubt, go back to rule number 1.

  7. Maybe it will suit the insurers not to have to bother with so many independent distributors, who, although an effective means of distributing products, can also be a thorn in their side. Nobody seems to have mentioned this aspect during all the debate that is going on. Are the insurers going to sit back and do nothing? Of course not. Maybe they have their own agenda post-RDR. There could be a significant number of insurer direct salesforces being launched after 31 December, and on a large scale. Think about it. It worked well back in the day, and can work well again. They would have complete control of their own distribution teams, can set the remuneration (commission?) levels that they are comfortable with, provide incentives to their sales people that are not available to those advisers who choose to remain independent, and they can retain control of everything in-house, including compliance and risk management. They would be given as favourable treatment by the FSA as the banks are now, because as we know, the FSA would much rather regulate large entities than small individual firms. Although it would be anathema to many independent advisers, a large number could be tempted to opt out of independence and join a direct selling operation. As the number of providers continues to contract, the value of remaining independent becomes less significant. So it could be back to the “good old days” of the seventies and eighties. The more things seem to change, the more they stay the same.

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