It was no surprise to see the FSA reject the will of the Treasury select committee and press ahead with the current RDR timetable.
With most advisers making great strides towards achieving the new requirements, and given the backdrop of small firms battling the economic conditions and possibly the bigger hurdle of business transition, a more balanced and pragmatic regulator may have agreed with MP demands for a deadline extension.
Unfortunately, our current regulator rarely displays either attribute.
However, there has been a marked shift in the FSA’s rhetoric and we will be holding the regulator to its word when it says it will continue to monitor the industry’s progress towards the 2013 deadline carefully.
If it appears progress is slowing or less optimistic than its current data implies, the regulator should be prepared to add more flexibility to the current cliff-edge deadlines. Adapting policy to take account of market trends is a sign of regulatory strength, not weakness. You would expect the regulator to show leniency to those who may be an exam or two short by the start of 2013. Policymakers should be looking to ensure as many good advisers as possible stay in the industry.
This episode will figure highly in the Treasury select committee’s inquiry into the Financial Conduct Authority. With a number of TSC mem-bers on the committee scru-tinising the bill that creates the new regulator, this may be the last time that a financial regulator can so flagrantly ignore the desire of Parliament.
Paul McMillan is editor of Money Marketing – follow him on twitter here