The FCA’s appointment of Robert Taylor as head of the regulator’s wealth management and private banking division is a significant step forward for the industry.
Following the launch of the division last year, this appointment means we can start to develop a clearer understanding of what he and the FCA intend to focus on in the coming years. And it should give us a stronger voice.
Our latest figures show Wealth Management Association members currently manage more than £600bn for individual investors, and the sector employs more than 30,000 people to do so. On top of this, as many as four million people in the UK are estimated to hold shares directly.
The RDR, now over a year old, means wealth management is rising in importance to the investing public, as the withdrawal of some of the major high street banks leaves even the moderately affluent middle classes without recourse to their usual channels of investment advice.
Meanwhile the internet and the rise of online brokers is making the possibility of owning a stake in a company much easier than it was even five years ago.
We in the industry are aware of our own capabilities and the challenges we face, but perhaps the most important task for the FCA is to fully understand who and what we represent.
Time and again policymakers have overlooked or misunderstood our sector. Most consider it too difficult to define. We need to explain again that our member firms need access to the global financial markets to meet the needs of their clients, and that wealth management therefore sits awkwardly with the prevalent regulatory assumption that everything is either retail or wholesale.
Robert Taylor’s expertise and career means we now have a regulatory team which properly understands our services. We have always advocated strongly to regulators they should harness the experience and expertise of practitioners wherever they can. This may well open up our industry to greater regulatory scrutiny – but it will be more appropriate scrutiny, based on a better understanding of what we do. Ultimately that should result in better outcomes for consumers: our clients.
We have a regulator that has told us it is willing to listen and act. Now it falls to us as an industry to engage with it closely.
Tim May is chief executive of the Wealth Management Association