Speaking at the FSA annual public meeting in London last week, chairman Adair Turner said uncertainty is “unsettling” but it is a fact of democratic life.
He said: “It would be idiotic to say that there was not uncertainty but the things we do that matter will have to happen, whatever the future organisational arrangements.”
Turner said the FSA’s task is to ensure the regulation, supervisory processes and people required to deliver a stable financial system are in place. He said: “These things will be required, whatever the division of responsibility between different institutions results from what- ever the electorate decides.”
Chief executive Hector Sants said the FSA is struggling to recruit staff following the Tory announcement. He said: “The proposals will increase uncertainty and make recruitment more difficult, which we have seen already.”
Sants insisted the FSA has evolved to become a “fundamentally different organisation” which is fit for purpose but he recognised that it is facing significant challenges.
He said: “I hope that, regardless of any changes to the high-level regulatory architecture in the UK, that the culture, the people and the operating model that we have created here at the FSA will continue to provide the effective supervision that society requires.”
Financial Choices partner Richard O’Fee says the Tories’ lack of commitment to the retail distribution review deadlines is causing concern for advisers, especially big national firms.
He says: “It is quite hard for the advice community to have this uncertainty. If the FSA changes course, it will not cost them anything but it will cost advisers.
“The FSA should say that due to the uncertainty, they are putting the RDR on hold so the industry does not spend money on things that may not happen.”