Briault, who was managing director of retail and was responsible for supervising Northern Rock, left the regulator by mutual agreement in March last year with a payout of £380,000.
He says Tory plans to axe the FSA, passing prudential regulation to the Bank of England and conduct of business to a Consumer Protection Agency, should not affect advisers.
He says: “The question is not what will happen as a result of the split because it is not clear to me that anything will happen, it is just moving deckchairs around. It is what responsibilities and powers that the consumer protection agency will have and that bit we do not know.
“The organisational structure is less relevant to IFAs because they tend to see the regulator almost entirely about conduct of business issues so they are less likely to feel the split between prudential and conduct of business regulation than a big company such as a bank.”
On the RDR, Briault says the only stream that the industry has successfully driven has been professional qualifications while the rest has been developed by the regulator.
He says: “In the initial stages of the RDR, the FSA challenged the industry to develop its own improved market structure. To a large extent, the work on professional qualifications has been led by the industry and now adopted by the FSA but the other streams had to be pushed forward by the regulator.”
Asked whether the FSA ever seriously considered separating sales and advice, Briault says the issue was more about termin-ology than a clear split.
He says it is vital that restricted advice is given a label that consumers understand because, when explaining their offering, advisers will “push the boundaries” in terms of what they offer and how they differ from IFAs.
Briault says: “In practice, how people can have conversations that involve no advice of any kind is quite difficult. The issue was never, strictly speaking, sales versus advice. The question is more about how much advice can you give within sales, how you describe that accurately to consumers and what regulatory requirements you place around it. I think that is still an interesting question which is not yet fully resolved.”
Briault says he is not completely convinced by the argument for a 15-year long stop for advisers, given that some problems with products or advice do not become apparent until long after the transaction.
He says: “The difficulty is differentiating between those cases where it is entirely reasonable for the consumer to be able to complain because there is no way they could have known there was a problem earlier and those people who really did just leave it too late to complain. I am not taking one side or another.”
Provider-led factoring is unlikely to find favour with the FSA, says Briault, because, in order to avoid introducing bias, all providers would have to offer exactly the same terms.
He says some product providers, such as those that offer unit trusts, may not want to offer a factoring service at all.
He says: “The only thing that might conceivably work and reduce the bias would be a general stream that makes a single financing package available to all advisers, completely separate from what products or services they agree with their client. That would, in effect, be third-party factoring.”
Asked if he has any regrets about the FSA’s regulation of banks before the financial crisis, Briault points to the regulator’s failure to spot the possibility of a liquidity crisis and its potential to severely affect retail and investment banks. He says: “Most of the concern was about credit risk and there was less focus on liquidity supervision and policy. The regret is that the collective intellectual failure happened and that nobody foresaw the nature of the shock.”
In April, Briault was appointed a non-executive director of IFA firm In Partnership, which he hopes to help guide through the RDR. In July, he also became a principal consultant at compliance and management consultancy practice Financial Services Compliance.