What is regulatory sauce for the goose is surely sauce for the gander. It would appear not, especially when the sauce is improving professionalism, the goose is the retail distribution review and the gander the mortgage market review.
There have been many unequivocal statements of intent from the regulator regarding forging ahead with the RDR. These have been coupled with a deter-mination to not give an inch on the implementation deadline for this piece of investment market regulation. Meanwhile, the announcement that the FSA will delay for up to three years the implementation of the approved persons regime for the mortgage market has kicked improving professionalism in our sector into the long grass.
The decision to delay introducing the AP regime to the mortgage market sends out mixed signals, not least because with these proposals it felt as if the regulator was finally getting it right by consistently applying the AP regime across all intermediaries and banks.
So why do we now find ourselves with a regulator so resolute on the issue for one sector of the industry, making all the right noises about the RDR and driving up professional standards, yet leaving the MMR in hiatus with no clear deadline? Why is it right to steam ahead with professionalism measures for investments but adopt a go-slow for mortgages?
We can already start to see regulation in our sector slowing down as the regulator prepares to be split up and with housing not on the political agenda.
However, brokers must continue to proactively prepare for intrusive regulation and the impact of the MMR, despite the FSA pulling back on implementation dates. Improving standards and professionalism in the industry should not be stopped by the delay.
I would like to see clear deadlines for the MMR as the good bits of the review, for example, around disclosure, are worth getting behind and will ultimately be to the advantage of both consumers and intermediaries.
Now is the time to make the very strong case for all future consultations to be done in the round. We should take advantage of this delay to have full and frank discussions on how all the different parts of regulation fit together, including the three consultations papers already published, as well as European proposals.
In the meantime, if the issue for the regulator is in physically getting people through the AP process then how about starting with brokers and intermediaries?
I have spoken to quite a number of firms that support this move and providing it is part of a clear industry timetable, with bank advisers following closely behind, I believe it should be considered.
I have complete confidence in the ability of professional intermediaries to go through the process and come out the other end unscathed. It would show leadership and demonstrate that we are already fit for purpose. The process would also enable us to weed out the small number of bad apples that still remain in our profession, which would be to everyone’s advantage.
John Cupis is managing director of PMS