I had hoped that the FCA would change the regulatory focus to one of weeding out the crooks that still populate the fringes of financial services, rather than continuing the FSA’s mission to ensure that only advisory perfection, or rather their very limited version of it, survives the RDR cleansing.
But recent comments about the way adviser charging is described indicate that Martin Wheatley’s team could be making the classic policing mistake of forever nicking the law abiding whose mistakes are easily spotted while under-resourcing the much harder job of catching the genuinely evil.
To hear the former England football team manager Sven-Goran Eriksson’s tale of woe at the hands of the sort of financial advisers to realise that it’s not just the poor that are sometimes naive. The rich and skilled can be equally gullible outside their area of expertise and inside ours. The commentary following that bit of news had regulators explaining how hard it was to police offshore financial advisers, which in the 21st century is a cop-out that a Hong Kong-trained regulator should be embarrassed about.
What regulation has undoubtedly achieved is the severe pruning of the advisory community, with those left having proved themselves masters of change management and reformation, whether made just in time or many years ago.
What is left is a consolidated and still rapidly consolidating group of decently run businesses. It is time to leave them to get on with sharing their new market and extending its reach so that more Britons start to plan properly again for retirement, old age, death and disability. For it is no coincidence that the apotheosis of regulation has coincided with the almost complete death of savings and investment among those hard-working families the Government so badly wants now to help.
So instead of focusing on the technical failings of those decently run businesses, the FCA should concentrate its vast resources on hard policing as well as a far greater emphasis on financial education.
On the policing side, the answer is to run out of town the crooks who do not engage with the FCA at all.
Dodgy dealers are much harder to bring to justice than a good IFA struggling to cope with the new world but he is not the one doing genuine harm.
Wheatley could take a leaf out of Boris Johnson’s book. Since the Met has de-prioritised catching those who speed on motorways because they are Britain’s safest roads and refocused resources on the tougher squads that catch and deter the much smaller and harder-to-find tribe of career criminals, crime rates have plunged. It is time for the FCA to do its version of the same.
And because the best way to cut fraud is not to regulate but to educate, the Money Advice Service needs to up its game.
I was on the MAS site recently looking at its protection pages and for the first time I thought they were accurate and clear and useful. So let me be perhaps the first of the Money Marketing commentariat to suggest that MAS is getting its act together under its new leadership team.
It is not just good content that is needed, though, it is a much clearer focus in its advertising on how people can avoid serious financial mistakes and on how to act on the knowledge gleaned from the site.
Education 21st century style combined with hard policing would be a great FCA combination in 2013 and beyond.
Tom Baigrie is chief executive of Lifesearch