The RDR consultation paper uses annex 1 to explain how the proposals fit in with their statutory objectives and integrates with the principles of good regulation. We are told that the cost-benefit analysis verifies that the benefits are proportionate to the burdens and restrictions imposed.
Once you have stopped laughing, check out this one: “(the proposals) set a framework within which beneficial innovation could arise.” Now here’s the clincher: “Our proposals have been designed to minimise the effects on competition.”
What preposterous tosh. The idea that competition can be anything other than devas-tated by the removal of half of the adviser population strikes me as a few degrees more than fanciful. As JK Galbraith stated, possibly with a cynical eye on future regulatory trends: “It is a far, far better thing to have a firm anchor in nonsense than to put on the troubled seas of thought.”
Nonetheless, until next year’s election assists in a mass eviction from Canary Wharf, we have to deal with the day-to-day tedium of regulatory interaction. Consider how refreshing it would be to hear one or more FSA luminary state, unequivocally, that independent financial advice is the most likely to result in beneficial outcomes for consumers and that, in recognition of the outstandingly low complaint figures, this form of advice will be championed to the extent of educating the consumer against the entreaties of the bancassurers.
The FSA often makes the point that firms must be open and co-operative in their dealings with them. Additionally, its website proclaims that it is an “open and transparent regulator”. As always, actions speak louder and last week’s “victory” for the FSA in their fight to retain secrecy over the names of the Lautro 19 serves to highlight the reality.
The reality is that, in this particular matter, where firms and consumers have an entitlement to know all the sordid details regarding the breach of contractual warranty by insurers, aided and assisted by regulatory ineptitude, the vaunted openness and transparency has been mislaid.
It is more important now than at any time since the passing of the FSMA that advisers stand up and fight for their futures. There are many, many issues that practitioners disagree on but also many where here is a consensus. It is for this reason that I acquiesced and agreed to take on the role as chairman of the IFA Defence Union.
There are too many rocky roads within our industry and we need advisers to assist in paving them and applying detours in sensible directions. The rhetoric surrounding the RDR tends to emanate from the self-servers who want to feather their own nests. These cuckoos always show us how their particular vision offers the most beneficial way forward for the consumer and it just so happens that this vision precisely mirrors their chosen business model. Pure coincidence, no doubt.
Theory and practice – rarely do these two extremes nestle together. For those advisers who feel threatened that their voice is not being heard, I say join with us in seeking to influence opinion and in ensuring that the industry moves forward in a direction that is both sensible and rooted in reality.