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Regulator must keep a close eye on pre-RDR progress

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


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There are 18 comments at the moment, we would love to hear your opinion too.

  1. Speaking of “rhetoric,” how, exactly, do you intend to hold the regulator to their word?

    The TSC tried – and failed – to steer the FSA. I doubt MM have anything in the locker that will compel the FSA in any direction once they’ve set their mind to it.

    “We’ll report the things we think are bad” is not the same as “holding them to their word.” Not even close.

  2. Sadly the FSA has the power of Stalin, but the incompetence of Mr Bean.

    I wouldn’t trust them to ”keep their eye’ on anything apart from their fat bonus packets and ramping up their bloated cost-base to force down the throats of their powerless victims.

  3. The timetable should be retained if for no other reason than to get this boring, repetitive RDR issue over and done with. The FSA/FCA must then be held accountable for the mayhem that will unfold post January 2013, and be prepared to take responsibility for any consumer detriment caused as a result.

  4. ‘You would expect the regulator to show leniency to those who may be an exam or two short by the start of 2013.’ – why, given level 4 is easy to attain.

    Anyone who can’t bothered to put the work in to achieve level 4 shouldn’t be allowed to continue post Dec 2012.

  5. Wow – I wish I was as bright as Ian. He must be so smart and cleaver. I would imagine that he is clearly a lovely person to work for and his advice must be first class. No compassion though.

  6. Ian @ 1.38pm

    That’s the attitude that has got this country into such a fecking mess! You carry on thinking of nothing but number 1 Ian. You must have sooooo many friends, bless you.

  7. No Axe to grind RDR Qualified 10th November 2011 at 3:30 pm

    Too right chippy
    ian could get a job at canary towers with that attitude.
    Maybe exams do not present a problem for him but surely
    he could show a little sympathy for those who may not have been in a classroom for 30+ years.
    but no he would rather show his own smug self righteousness.
    Hope he feels the same when he is 3 years away from retirement and some muppet tells him to requalify at the same time he is running a business in the worst recession the country has ever seen.

  8. Chippy and Co

    With respect if you think ‘I have an attitude’ by telling it as it is then so be it.

    I’m not smart, but could be bothered to put the time and effort in to pass the required exams.

    If you can’t pass basic exams then you are in the wrong job. You have ample time to study and sit them.

  9. In defence of ‘Ian’, and against ‘Chippy’ and ‘anonymous’, if you are a good practising IFA, Level 4 exams should not be that difficult, as like it or not, they cover what you are most likely doing on a day by day basis. Exam technique is however a different matter, and I have been out of the classrom for 38 years now!

    But to return to the thrust of this article, the FSA ae so strongly set on RDR that they will not be moved, and one suspects that if necessary, they will massage any evidence required to show that the required level of progress is being made.

    And as for ‘Policymakers should be looking to ensure as many good advisers as possible stay in the industry’, it is too late, as the ‘cull’ of advisers is already well under way – I’m sure we all know some who have left already – I know of 3 firms no longer trading because of the new requirements!

  10. Chippy, they have introduced multiple choice exams for people who have trouble writing. The answer is in front of you, just pick it. A monkey given enough attempts would pass.

    I don’t work in financial services but are often amazed that IFAs expect people to come to them for financial advice when they are incapable of passing a few multiple choice exams over several years in their own field of work.

    And they call this professionalism. You should be ashamed.

  11. Hi Anonymous @ 5:22pm and Ian

    I think you misunderstand me. I support professionalism and I have level 4 myself and some more. I just thought that Ian’s dismissal of those that are struggling was a little heartless.

    I have advisers in my own practice who are great advisers in specialist areas but are struggling to pass exams in areas on which they do not advise.

    We are told that we need to become specialists rather than GP’s but the exam system does not recognise this.

  12. Chippy

    I’m not heartless, just being realistic.
    Level 4 is basic stuff.
    If your colleagues put a bit of effort in they will be fine.

  13. If you can’t sit and pass the exams required then you have no business advising anyone. I hadn’t taken an exam since FPC 1,2 & 3 over 13 years ago yet I was able to get qualified via the various R0 exams without any revision at all. I just sat at a PC and ticked the boxes. These are exams on what we all do! It’s like a Doctor not wanting to be tested on his skills but happy to operate that afternoon!

  14. At the age of 63 I am awaiting my final mark for the IFS qualification,

    It has been a challemge to say the least but at least following a chat with my GP andf the letter she wrote for me the IFS gave me a scribe for the 3 hour exam.

    But if you are not used to dicatating for 3 hours that too was a challenge.

    Now I have leant just three things

    If you sell an antique it is liable to CGT

    an EU sipp is useful for someone with a buy to let portfolio worried about IHT

    Finally how to manually calculate a tax free lump sum from a paid up final salary pension plan ( mind you I would never ever do such a calculation manually there are computers that will do that autmatically )

    It has been a complete waste of my time and I feel no dfifferent to how I felt before I started

    Exams make little diffence to our ability to do the job

    IMHO what matters is your ethics Knowing the difference between right and wrong and how to deal with your clients

    How to handle a death claim or how to compose the card for the flowers for a new addition to a clients family or a bottle of champagne for their new house

    That is far more important

    Good luck to all those srtruggling or happy retirement to those that will give up

    By The way I estimate numbers of adviser will drop 30 -40%

  15. Ian

    Of course acheiving level 4 will make you a much better adviser (not) money making exercise for all concerned, when will people realise the IFA market is doomed qualifications or not.

  16. Ladies and Gentelment, listen up.

    The whole purpose of the RDR is not to provide transparency and a better outcome for consumers it is to destroy and render ineffective in the market place the position of the IFA as we have known and loved it for as long as I have been an IFA (since end of 1990 ) and pass over the provision of financial products and services to the banking and direct provider sectors.

    Any sensible assessment of the financial services industry would have concluded that after the recent lax regulation and excesses of the banking and direct providers sectors, that the only viable and consumer friendly method of offering financial products and services to the general public would be to make any provider who wished to engage in such activities registered as IFA.

    When someone presents you with a cliff edge, no choice as to whether you wish to go over or around or go back where you came from, you have to assume that their motives in banning commission payments and making all IFAs exceed their current qualification level with exams which seem more designed to enable you to qualify as a fund manager (alph, beta, sharpe ratios etc etc ) than as an adviser offering retail investment and protection solutions from the whole market place, which by definition is what we do but reject outright those products and solutions which are blatantly unsuitable for the majority of our normal everyday middle market clients, then one has to assume that once you eliminate the premis that the regulator who we actually pay for (no taxpayers money is used to shaft us, it is our own funds) will never admit it got something wrong, even Sants won’t take responsibility for the banking collapse, even though it happened on his watch and he had sufficient information to hand to anticipate and probably avoid it with better and more face to face regulation of these failing institutions.

    I do not like the way he and his team do business, they are smug and immune from any accountability for their inadequate performance to date and the same bunch of no hopers who run the FSA will be intimately involved in the FCA

    What hope ? Abandon hope all ye who entertain a profitable business career in our industry now or in the future, they will milk us dry until we are out of business permanently.

    And NO, I am not paranoid, they are out to get us and we do not have any power to stop them.

    If the major networks had stood up to the FSA and said they were not prepared to implement the changes, life would be very different, the trouble with the top men in the networks is that they do not have the courage or commitment to the common good our forefathers had in the world wars and were not prepared to sacrifice their cushy numbers and fat salaries to make a united stand.

    Ken Davey’s about the only voice prepared to speak out and he got nowhere because others had not the courage to back him.

    Sants will succeed because of these peoples inadequacies.

  17. Well said Andy K and to the others, whilst folks are bickering about exams…… I am bigger, better and done it before etc etc.
    The main issue is the CLIENT is loosing THEIR CHOICE regarding compensation for their Adviser regardless if Tied, Independant, Multi tie, Restricted….the advice is the same only the providers differ.
    “market forces” always dominate…look at the euro, if the regulation is wrong the market either works or does not and I see 20 to 30% not bothering post post 2013 and another 40% who wont be paying their FSA fees post 2014.

  18. Anon at 7.42 wins the award for the most pointless post.

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