View more on these topics

Take directive action

Cardiff Pinnacle’s Keith Martin urges IFAs to start lobbying Brussels instead of complaining about the FSA

When I recently mentioned to a colleague that the European Commission was taking action against 10 countries for failing to properly implement the Insurance Mediation Directive, I was not surprised by his response: “Why does the UK bother following these rules and incurring the costs when other countries don’t? Who wants to be in a race where the first across the line is the one that is disadvantaged?”

The UK Government did the right thing by implementing the IMD on time. The European Commission will no doubt soon bring other countries into line. However, I am certain that the impact of the IMD in each country will not be uniform.

If you have got all the business you can handle on your own doorstep, you are prob- ably not bothered but if you like the idea of selling to some of the 400 million EU citizens outside the UK or you do not want intermediaries from other countries selling to your clients, perhaps you are concerned. After all, we should not lose sight of the IMD’s purpose – to remove barriers preventing intermediaries from selling to consumers in countries other than their own.

So, if France’s post-implementation version is easier and cheaper for intermediaries to work within than our own, then one might argue that there is prima facie evidence that French IFAs have a competitive advantage over our IFAs in the UK.

The source of these differences is mainly down to how each country implements the directive. Some directives do not allow states to introduce rules that go further than the directive’s content while others may have some or no such restrictions.

The IMD had no restrictions. The UK Government amended secondary legislation, giving the FSA the authority to police insurance selling.

The FSA then had to do two things – write rules encomp- assing the IMD’s provisions and meet its regulatory object- ives, as laid down by Parliament in the Financial Services & Markets Act 2000.

This led to the inevitable complaints about gold-plating. Far be it from me to def- end the FSA, but it did find itself between a rock and a hard place. Implementing the IMD but not following its own stat- utory objectives would have displeased Westminster. Ignoring the IMD would have upset Brussels. This was a clash of domestic and European law and the result is ICOB and the other changes to the handbook that the FSA has deemed necessary. Other countries will be faced with the same issue but the outcome will not be exactly the same as here.

The important issue is whe-ther or not UK IFAs have a level playing field with their overseas peers and we probably will not know that until all 25 countries have fully implemented the IMD.

This Brussels-Westminster law mixture is likely to be repeated in other areas of interest to the IFA sector. As the FSA regulates most, if not all, the products that the commission is concerned with, any decisions made at Canary Wharf should get your attention – assuming the commission introduces a new directive or amends an existing one.

Responses to a European Commission Green Paper on asset management are winging their way to Brussels. The commission is mulling over what changes may be needed to the investment fund sector to make the market work more effectively. If you sell investments, this will be of interest to you. If you sell mortgages, then the Mortgage Credit Green Paper is right up your street. If insurance premium rates are your concern then you had better watch out for Solvency II.

These will eventually find their way into UK law, most likely accompanied by moans about gold-plating. But are we missing the point? Instead of complaining, shouldn’t we be lobbying?

As directives first see the light of day in Brussels, that seems the sensible place to start. After all, why criticise the FSA for putting laws into practice that the politicians in the European Parliament have created?

In my admittedly limited experience, I have found that our politicians in Brussels are very willing to represent the country’s interests when it comes to voting on and amending the texts of prospective directives. It is up to us to spot directives while they are in their formative stage, such as the asset management and mortgage credit examples above. It is also our role, not just to say what we do not like but also to explain why and suggest an alternative. In reality, it is a bit more compli- cated than that but the prin- ciple holds good.

It is up to us to help ourselves on EU law matters. What works best – complaining about gold-plating or getting our politicians to represent our views in Brussels?


Welsh Assembly in bid to ban property Sipps

The Welsh Assembly has voted in favour of lobbying the Treasury to exclude Wales from plans to allow residential property to be held in Sipps from A-Day. The resounding no vote was spurred by fears that local people will be priced out of homes in their communities. Welsh assembly members have called the Sipp policy […]

Lloyds TSB and ING top Tulip HNW survey

Lloyds TSB has the most high and ultra high net worth customer relationships while ING comes top for customer wealth in this sector, according to a Tulip Financial Research survey.For customer relationships the research found Lloyds TSB has 174,000, followed by Barclays and Natwest, each with 137,000, and HSBC with 132,000.In terms of liquid wealth […]

Scottish Life appoints Shields as head of individual business

Scottish Life has appointed Barry Shields as head of individual business with immediate effect.The pensions specialist arm of Royal London is hoping to grow its proposition in the individual pension market place.Shields team will be responsible for supporting the individual and Talisman 98 propositions and for developing the Sipp propositions for the post A-Day market.

Denne sets the first stage for wrap process

Falcon Group has put in place the first steps of what will lead to a full wrap proposition as it bids to increase its wealth management capabilities and attract new advisers. Business development manager Piers Denne, who joined the firm last month, was brought in to introduce and develop the project which he says will […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm