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Tories plotting a revolution

The Tories want to revolutionise retail regulation – their plans amount not to reform but to FSA Mark II.

Under Shadow Chancellor Oliver Letwin’s plans, retail investors and savers would get the information they need to make informed decisions but they would not have a system of regulation that sought to minimise their risk when investing.

Letwin even suggests that certain concepts of misselling are mistaken, given that many investors knew the risks.

This would be a massive change in the working lives of IFAs and mortgage brokers and the way they relate to the FSA.

The Tories are countenancing a revol-ution in financial services almost as fundamental as that ushered in by the FSA’s creation in the first place.

But there are many ifs and buts. If we assume a Conservative victory at the next election, even a thinned-down FSA would still require a hefty piece of primary legislation and time in Parliament to pass it.

The information requirement is intriguing but would the direct mailers have fallen foul of this Conservative version of the FSA? The burden on advice would be much less onerous – PI bills and FSA fees might fall, vexatious challenges from chancing investors might be seen to be just that. Risk and caveat emptor would become the name of the game again.

The Government could also probably drop its wheeze for light-touch regulation of Sandler products – it might all be light touch. The very fact that the Government and insurers had to dream up this concept suggests to this newspaper that something is very wrong with the burden on advisers.

But we just have to wonder how resilient Letwin’s plans will be to the first Govern-ment accusation – whether it is right or wrong – that the Conservatives have lined themselves up with the missellers.


D-Day dodgers

With the approach of D-Day – December 1 – the minds of tied and independent advisers should be straying towards the consideration of their regulatory status in the newly depolarised world. Depolarisation offers advisers the options of being whole of market, limited choice or single provider. Currently, of course, there are only two choices -IFA or tied adviser.


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