View more on these topics

Rules of engagement

George Osborne did the right thing last week. This is not a party political statement but a comment on what UK plc needs from those who lead it and their attitude to dealing with European regulation. The signal the Chancellor sent in attending the European Council of Finance Ministers in the first few days of his tenure was unmistakable – Britain is here to do business.

Osborne went to Brussels with little hope of being able to win the hedge fund vote. The deal was sealed well before the general election – but the final stages were postponed until after it for the convenience of the then Government. However, just by showing up, he did more than previous incumbents of No 11 who, in my opinion, stayed away too often and we lost influence as a result.

If UK financial services and the advice profession are to emerge strongly from the aftermath of the banking crisis, the biggest threat we have to fend off is the tsunami of new regulatory, tax and capital-adequacy proposals now ricocheting around Brussels.

Too often we have been outflanked by French and German interests, not because they are better lobbyists but because they have a clear plan and a cohesive vision for the future they are trying to create. We have sought to rely on a veto and a tactic of little engagement. This simply leads to poor outcomes for the UK, as witnessed in the hedge fund directive.

We need a strong view and a positive vision that protects the UK financial services industry. There is nothing to be ashamed of in this – being a good European does not mean sacrificing national interest but representing it.

Aifa is acutely aware of the dangers of over-regulation. Most regulatory proposals now emanate from Brussels and we must engage with them at that level or be forced to argue over the mere details of implementation by the time it reaches the FSA.

In a recent speech, Hector Sants spoke of a future where the rules came from Brussels and the FSA was a home state supervisor implementing them. If that is to be the case, we need more engagement by our politicians, regulators and trade bodies working for a common purpose.

The UK model is different to that in continental Europe. It is for us to explain that this has not occurred to the detriment of clients but to better serve their needs. Silence may be golden in some circumstances but today we need to give voice to something far more engaging – a clarion cry for a prosperous, competitive UK financial services.

Chris Cummings is director general of the Association of Independent Financial Advisers

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Quote “If UK financial services and the advice profession are to emerge strongly from the aftermath of the banking crisis, the biggest threat we have to fend off is the tsunami of new regulatory, tax and capital-adequacy proposals now ricocheting around Brussels.”

    Why are there such proposals ricocheting around Brussels?

    Some might conclude … that it was the clear and visible inadequacy of past regulatory, tax and capital-adequacy regimes, particularly as they applied to banking, that failed to detect let alone prevent the banking crisis … and not be in the least surprised therefore that they are up for discussion and revision.

    If changes to what failed were not on the agenda we should indeed be worried.

    Quote ” The UK model is different to that in continental Europe. It is for us to explain that this has not occurred to the detriment of clients but to better serve their needs.”

    Given Northern Rock, RBS, HBOS, Dunfermline Building Society, Equitable Life, Split Caps, Keydata ….et al, it’s gonna have to be be one helluva an explanation!

  2. Exasperated me 28th May 2010 at 11:26 am

    “This is not a party political statement”

    If it looks like a duck…

  3. Evan Owen - IFA Defence Union (for now) 28th May 2010 at 11:50 am

    We in the UK financial services industry have had regulation coming at us from all directions for over two decades, what has regulation done for us? By ‘us’ I mean the people of Britain.

    Each knee-jerk reaction to failures results in more regulation yet each failure seems larger and more damaging than the previous one.

    What do my contacts in Brussels think of UK regulation? Not a lot.

  4. Julian Stevens 28th May 2010 at 1:44 pm

    As well as a banking crisis, the UK financial services industry also has to contend with a UK regulatory crisis. This has developed (and is continuing to worsen) largely due to the fact that although a Code of Practice for Regulators exists, this is not only completely and brazenly ignored by the FSA but no effort is made to enforce its provisions.

    This massive home problem needs urgently to be addressed before we start worrying any further about what Brussels are chucking our way.

    Write to your MP about it. A template is available at the Adviser Alliance website.

  5. Over regulation but regulation which completely ignores 2 million consumers who can be bothered to get of their bums and put pen to paper, for every one which did, how many did not bother?

    I would have a little respect, although may still need to voice my opinion, with regulation which had sorted all of the real issues, brought in rules first to address those consumer complaints against high street banks then happened to get a little over zealous with us.

    But when they leave those millions of complaints and FOS gets excited about the possibility of expansion due to an expected rise in complaints then you just have to wonder about them all.

    Respect is earned, this regulator deserves no respect from anyone until it addresses real issues first.

    Meanwhile FOS is probably eying up larger more expensive properties and those at the top wondering what wages they will command when they also have an empire like the FSA.

  6. I suggest we deal with the immediate threat to our livings from the UK regulator before we dilute our forces, by going hell for leather into the European ‘theatre’. Apologies for conflict metaphors but to be honest we are under seige from the enemy within our boundaries, not to mention the PFS who are peddlars and propagators of the impending exam regime, dressing up a thinly veiled money grabbing exercise as a ramping up of professionalism’

    Deal with the enemy on your doorstep first, then think about matters further abroad. I’m a sole practititioner, and to be honest, I can deal with the capital adeqacy issue without too much problem. It’s the massive knockout blow coming my way from the RDR debacle that will finish me off, long before the capital adequacy regime bites

Leave a comment